Costing worked example

Quote Margin at 23% target margin: a worked example in costing

This worked example runs the quote margin numbers for a tougher week than the baseline: 23% target margin instead of the typical 32%. Calculate gross margin, markup, target price, and margin gap for a manufacturing quote.

The inputs for this scenario

  • Unit cost: 12.4 $ / unit (held at the documented default)
  • Selling price: 18.75 $ / unit (held at the documented default)
  • Target margin: 23 % (the input this scenario stresses; the baseline uses 32)
  • Quote volume: 5,000 units (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Gross margin = (price − cost) ÷ price.
  • Gross margin works out to 33.87 % at these inputs, and this is the headline figure for the scenario.
  • Markup works out to 51.21 % at these inputs.
  • Target price works out to 16.1 $ / unit at these inputs.
  • Gross profit works out to 31,750 $ at these inputs.

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. A result at this level usually justifies acting on the stressed input before touching anything else, because every other figure in the table is downstream of it.

Results at a glance

  • Gross margin: 33.87 % (headline result)
  • Markup: 51.21 %
  • Target price: 16.1 $ / unit
  • Gross profit: 31,750 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Quote Margin calculator, set target margin to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.