(19BII) Marketing Formulas

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Four marketing formulas derived from Accountants Handbook of Formulas and Tables; (14) Marketing Formulas, Prentice-Hall, 1963, pages 96-98

Calculating the Selling Price …

Markup based on purchase price
formula
SP=PP×(1+MPP)
where
SP = selling price
PP = purchase price
MPP = markup % based on purchase price
example: markup of 66⅔ % on product purchased for $12
SP = 12 × ( 1 + 0.6666 ) = 12 + 8 = $20

Markup based on selling price
formula
SP=PP÷(1-MSP)
where
SP = selling price
PP = purchase price
MSP = markup % based on selling price
example: markup of 40 % on product purchased for $240
SP = 240 ÷ ( 1 - 0.40 ) = 240 ÷ 0.60 = $400


Loading the Selling Price …

Markup based on purchase price
formula
SP=PP×(1+MPP)÷(1-LF)
where
SP = selling price
PP = purchase price
MPP = markup % based on purchase price
LF = load factor % based on selling price
example: markup of 66⅔ % on product purchased for $12 plus 10 % sales commission
SP = 12 × ( 1 + 0.6666 ) ÷ ( 1 - 0.10 ) = ( 12 + 8 ) ÷ 0.90 = $22.22

Markup based on selling price
formula
SP=PP÷(1-(MSP+-LF))
where
SP = selling price
PP = purchase price
MSP = markup % based on selling price
LF = load factor % based on selling price
example: markup of 40 % on product purchased for $240 plus 10 % sales commission
SP = 240 ÷ ( 1 - ( 0.40 + 0.10 ) ) = 240 ÷ ( 1 - ( 0.40 + 0.10 ) ) = 240 ÷ 0.50 = $480


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