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Recommended Retail Price
A selling price that is recommended by the manufacturer or wholesaler
Competitors Price
Prices charged by businesses competing in the same market
Market Reaction
The response of customers in a particular marketplace to price levels for a particular good or service.
Quotes
A method determining a selling price by estimating costs involved with a particular job, and then adding on a certain amount of desired profit.
Percentage Mark-Up
Determining selling prices by adding to the cost price a predetermined profit margin.
Cost Volume Profit Analysis
An analysis that allows a business to determine a selling price or volume of sales that will let them achieve a specific profit goal.
Variable Costs
Costs that vary directly with the level of activity.
Fixed Costs
Costs that do not vary with the level of activity.
Break Even Point
The level of sales where total revenue equals total expenses and the business makes neither a profit nor a loss.
Cost Volume Profit Analysis Formula
Quantity = (Fixed Costs + Desired Profit) / Selling Price - Variable Costs
Selling Price using Mark Up
Selling Price = Cost Price x ( 1+mark up/100)
Cost Price using Mark Up
Cost Price = Selling Price / (1 + Mark up/100)
Calculate Mark Up Percentage
Step 1: Selling Price - Cost Price = x
Step 2: (x/cost price) x 100
Sales Revenue
Selling Price x Quantity
Total Variable Costs
Variable Cost x Quantity
