Cost Analysis Techniques: Margin Pricing Research

Cost Analysis Techniques
Name
Institution
Margin Pricing
Letter M stands for my last name making my pricing approach the Margin pricing. Margin pricing refers to the difference between the sales and the cost of goods. In this case, we talk of gross margin. In getting the profit margin percentage, we take the selling price and total cost difference divided by the selling price as illustrated below.
Gross margin = selling price – total cost
Gross margin percent = (selling price – total cost) / selling price
For instance, if the selling price is $ 2,000 and the total cost $ 500, then the gross margin is $(2000-500) = $ 1500.
Gross margin percent = $(1500/2000) = 0.75 or 75%
If the gross margin is known and unknown selling price, to calculate the selling price we use;