i used to have a table that had all of the calulations for the gross profit percent you made. ie cost of part is $35.00 and i wanted to make 40,50,60,30,20,10, etc gross profit. do anyone have the formula?
35.00 x 1.67 = 58.45 sale price to get 40% gross.
i wish i could find my table....still looking.
turbo59
table
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Gary J. Naples
table
Here is an easier way without needing a table of pricing variables. Also, it works easily with any amount and all you really need is a basic calculator.
Just divide your product cost by the opposite (cost compliment), expressed as a decimal value, of your desired gross margin amount. The result is the list or desired selling price.
For example, a 40% gross margin on a part with a cost of $15.75 is calculated as follows:
$15.75 divided by .60 = $26.25
If you wanted to calculate a 33% gross margin on the same part it is done the same way.
$15.75 divided by .67 = $23.50
Gary J Naples
FREELANCE ASSOCIATES, INC.
Just divide your product cost by the opposite (cost compliment), expressed as a decimal value, of your desired gross margin amount. The result is the list or desired selling price.
For example, a 40% gross margin on a part with a cost of $15.75 is calculated as follows:
$15.75 divided by .60 = $26.25
If you wanted to calculate a 33% gross margin on the same part it is done the same way.
$15.75 divided by .67 = $23.50
Gary J Naples
FREELANCE ASSOCIATES, INC.
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jazdale
table
Here's a quick way to see what effect a price escaltor has on your parts.
In ADP, go into MSSO (setup sources).
1. Enter a source and answer Y to escaltors.
2. In the price6 - price10 fields, put in your escalated amount (cost + 40)
3. Go into ENG or RPG and run a simple english statement - such as
LIST PART-NO. COST PRICE6 LIST WITH SO = "100"
Couple of points.
1 Try not to use price6-10 fields that are used in cost-break-escalators (PBE)
2 When done, go back into MSSO and remove escaltor by typing NONE in the formula
Dale
In ADP, go into MSSO (setup sources).
1. Enter a source and answer Y to escaltors.
2. In the price6 - price10 fields, put in your escalated amount (cost + 40)
3. Go into ENG or RPG and run a simple english statement - such as
LIST PART-NO. COST PRICE6 LIST WITH SO = "100"
Couple of points.
1 Try not to use price6-10 fields that are used in cost-break-escalators (PBE)
2 When done, go back into MSSO and remove escaltor by typing NONE in the formula
Dale
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Chuck Hartle
table
Gary is showing you the recipicol way of getting gross profit which is the way we look at it. Since just about every mfg has a suggested list price that has a 40% gross profit margin, this would be calculated by
10.00 divided by .60 = $16.67 for a 40% profit margin. Some mfg's will round it up to $16.70 or $16.75.
For the purposes of applying escalators, it would be simple to state that if you were to make a 40% gross profit margin on everything you sell, then you would simple state
Cost + 67.00 would equal "suggested retail" at a 40% profit margin.
Thus, if you were to escalate your sale price to
Cost + 75.00 you would be saying the same as
List + 8.00 or a 43% gross profit margin.
In the example above, your list price would be $17.50 instead of $16.67. You then would divide $7.50 profit into the $17.50 sale price to achieve the 43% gross profit margin.
Basically, the same as Gary is stating from a starting point of Cost + 67.00 equals mfg suggested list price.
Chuck Hartle'
10.00 divided by .60 = $16.67 for a 40% profit margin. Some mfg's will round it up to $16.70 or $16.75.
For the purposes of applying escalators, it would be simple to state that if you were to make a 40% gross profit margin on everything you sell, then you would simple state
Cost + 67.00 would equal "suggested retail" at a 40% profit margin.
Thus, if you were to escalate your sale price to
Cost + 75.00 you would be saying the same as
List + 8.00 or a 43% gross profit margin.
In the example above, your list price would be $17.50 instead of $16.67. You then would divide $7.50 profit into the $17.50 sale price to achieve the 43% gross profit margin.
Basically, the same as Gary is stating from a starting point of Cost + 67.00 equals mfg suggested list price.
Chuck Hartle'
[This message has been edited by Chuck Hartle (edited 11-18-2002).]
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ralphc10