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Cost Plus Pricing Calculator

Work out cost plus pricing instantly with clear inputs, formula shown and shareable results.

About Cost Plus Pricing Calculator

Cost-plus pricing adds a fixed percentage to fully absorbed cost. It is transparent and defensible — which is why it dominates government and construction contracting — but it ignores what customers will actually pay, so check the result against the market.

Formulas

Cost-plus price

Price = (Direct cost + Allocated overhead) x (1 + Markup %)

Resulting margin

Margin % = Markup % / (1 + Markup %) x 100

Worked example

With the default values below, Cost Plus Pricing Calculator returns Cost-plus selling price of $104.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Direct cost per unit
64
Overhead allocated per unit
16
Markup on total cost
30

Results

Cost-plus selling price
$104.00
Fully absorbed cost
$80.00
Profit per unit
$24.00
Resulting gross margin
23.08%

Step by step

  1. 1Values used
  2. 2Cost-plus price
  3. 3Resulting margin
  4. 4Cost-plus selling price= 104.00
  5. 5Fully absorbed cost= 80.00
  6. 6Profit per unit= 24.00
  7. 7Resulting gross margin= 23.08

Assumptions and limits

  • The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Why include overhead?

A markup on direct cost alone often fails to recover fixed overhead at low volumes, so the contract looks profitable while the business loses money.

When is cost-plus a bad idea?

When your costs are higher than a competitor's — you price yourself out — or when customer value far exceeds cost and you leave money on the table.

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