Pricing
Cost-plus pricing, per unit.
Enter your total costs for a batch, how many units it makes and the markup you add. See cost per unit, price per unit, and total profit.
Price per unit = (total cost / units) x (1 + markup %). $1,000 of cost over 100 units is $10.00 each; a 30% markup makes the price $13.00 and the margin 23.08%.
Your numbers
Result
Worked example
A batch costs $300 materials + $400 labor + $200 overhead + $100 other = $1,000.00. It makes 100 units, so each costs $10.00. A 30% markup adds $3.00, so the price is $13.00. Selling all 100 gives revenue of $1,300.00 and profit of $300.00, a 23.08% margin.
How it works
Cost-plus pricing sets price from your costs, not from what customers will pay. It guarantees the markup on every unit only if you sell all of them and your cost per unit is right, which depends on how you spread overhead. Treat the result as a floor: check it against competitor prices and what buyers accept before you commit. Unsold units are cost with no revenue, so total profit assumes the whole batch sells.
Sources and basis (retrieved 2026-10): arithmetic on your inputs using the standard textbook definitions of markup (profit / cost) and gross margin (profit / price). No outside data or third-party figures are used.
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Quick reference table
| Markup | Price on $100 unit cost | Profit per unit | Margin |
|---|---|---|---|
| 5% | $105.00 | $5.00 | 4.76% |
| 10% | $110.00 | $10.00 | 9.09% |
| 15% | $115.00 | $15.00 | 13.04% |
| 20% | $120.00 | $20.00 | 16.67% |
| 25% | $125.00 | $25.00 | 20.00% |
| 30% | $130.00 | $30.00 | 23.08% |
| 40% | $140.00 | $40.00 | 28.57% |
| 50% | $150.00 | $50.00 | 33.33% |
| 75% | $175.00 | $75.00 | 42.86% |
| 100% | $200.00 | $100.00 | 50.00% |
Common mistakes
- Leaving out overhead or your own labor, so the "plus" is really your wage.
- Dividing cost by the wrong number of units, for example units started instead of units that pass inspection or sell.
- Treating the markup as the margin. A 30% markup is a 23.08% margin; to hold a margin target use the selling price from target margin calculator.
- Assuming the whole batch sells at the full price. Discounts and unsold stock cut total profit below the figure shown.
FAQ
What is the cost-plus pricing formula?
Price = unit cost x (1 + markup %). Unit cost is your total costs divided by units produced.
What costs go into cost-plus pricing?
Materials, direct labor, an allocated share of overhead and anything else that goes into making and delivering the unit, such as packaging and freight-in.
Is cost-plus pricing the best way to price?
It is simple and covers costs, but it ignores demand and competitors. Use it to find a minimum viable price, then test the market.
How is cost-plus different from a margin target?
Cost-plus adds a percentage of cost. A margin target is a percentage of price, so the same percentage gives a smaller profit.