CIMA P1 Syllabus C. Short-term Decision Making - Margins & Mark up - Notes ^{2 / 2}

Cost plus pricing means that a desired profit margin is added to total costs to arrive at the selling price.

Mark-up profit

is calculated as a percentage of the total costs of the job

e.g. 20% mark-up, for example 20% of the total cost of $100 is $20 is the mark up profit

Margin profit

is calculated as a percentage of the selling price of the job

e.g. 20% margin, for example 20% of the selling price of $100 is $20 margin profit