This tutorial shows how to calculate selling price from cost and margin in Excel. A good selling price is very important to create a successful business with products or services. A businessman has to cover his cost of goods and logistics with selling prices. So, it’s necessary to fix a suitable selling price. The selling price not only has to be profitable for businessmen but also has to be convenient for the buyers. Let’s see how we can easily calculate the selling price.
Download Practice Workbook
You can download the practice workbook from here.
What Is Selling Price?
The selling price is the amount that a customer pays to buy a product or any sort of service. If we want to create a successful revenue model in business, selling price is very important. Also, to set a fixed profit margin we need to choose the correct selling price. Before selecting the selling price of any product we need to consider the following 3 factors:
- The price that customers will pay willingly for a product or service.
- A price that supports the sales and revenue model.
- The price that can compete in the market.
Step-by-Step Procedure to Calculate Selling Price from Cost and Margin in Excel
In accounting, we can calculate selling prices from cost and margin using a simple formula. We will demonstrate the whole method in two easy steps. It will give you better insights into the formula that we will use. To illustrate the steps we will use the following dataset. In the image of the dataset, we can see the cost price of different products. Also, we can see that the margin for all products is 10%. Here, we will calculate the selling price using the costs and margin from the dataset. Despite the process being so simple, we are using two steps to explain this tutorial.
STEP 1: Create Excel Formula
In the first step, we will just create the formula to calculate the selling price from cost and margin in excel. The generic formula that we will use in this step is:
Selling Price = Cost/(1-Margin%)
Let’s see the actions that we will perform in STEP 1.
- To begin with, select cell D7.
- Additionally, type the following formula in that cell:
Here, we have created this formula from the generic formula. In the above formula, cell C7 is the Cost price. Cell C4 represents the Margin.
STEP 2: Calculate Final Selling Price
In this step, we will see how we can get the final selling price using the formula that we inserted in STEP 1. To do this follow the below instruction after completing the previous step.
- After inserting the formula in cell D7 press Enter.
- As a result, we get the selling price of our first product in cell D7.
- Furthermore, select cell D7.
- Then, move the mouse cursor to the bottom-right corner of cell D7. A plus sign Fill Handle tool will be visible.
- Moreover, click on the Fill Handle.
- After that, drag the Fill Handle tool from cell D7 to D8.
- Lastly, we can see the selling price of all products in the following image. So, we have calculated the selling price of all products by a 10%.
In conclusion, this tutorial shows how to calculate the selling price from cost and margin in Excel. Use the practice worksheet that comes with this article to put your skills to the test. If you have any questions, please leave a comment below. Our team will make every effort to react to you as quickly as possible. Keep an eye out for more inventive Microsoft Excel solutions in the future.
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