Costing worked example

Quote Margin at 37% target margin: a worked example in costing

This scenario runs the quote margin calculation on the strong side: 37% target margin, with every other input held at its documented default. Use before sending a quote or deciding whether a requested price meets the target margin.

The inputs for this scenario

  • Unit cost: 12.4 $ / unit (unchanged)
  • Selling price: 18.75 $ / unit (unchanged)
  • Target margin: 37 % (raised for this scenario; the documented default is 32)
  • Quote volume: 5,000 units (unchanged)

Working through the calculation

  • Applying the documented formula (Gross margin = (price − cost) ÷ price) to the inputs above produces each figure below.
  • At this operating point the engine returns 33.87 % for gross margin, the number this scenario is built around.
  • At this operating point the engine returns 51.21 % for markup.
  • At this operating point the engine returns 19.68 $ / unit for target price.
  • At this operating point the engine returns 31,750 $ for gross profit.

How this compares with the baseline

  • Against the tool's baseline example, where target margin sits at 32% and the headline result is 33.87 %, this scenario lands almost exactly on the baseline at 33.87 %.
  • Use it while pricing an RFQ or PO line to confirm a quote clears your target margin and to see the dollar profit a volume commitment delivers. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Gross margin: 33.87 % (headline result)
  • Markup: 51.21 %
  • Target price: 19.68 $ / unit
  • Gross profit: 31,750 $

Run it with your numbers

  • Every input above is editable in the live Quote Margin calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.