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This is an equation to calculate the Selling price:

(Direct Cost / (100 - Desired Profit)) * 100

How do you call the result of (100 - Desired Profit)? Say I wanna say, "Selling Price: Direct Cost divided by ??? and multiplied by one-hundred."

(I think percentage isn't the right word.)

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    When I want both the cost and profit to be $5$, the selling price comes out to about $5.26$. Is this the desired behavior? Maybe it doesn't really matter in a terminology request (I don't know of any word for what you're asking about, sorry) but it just seems odd. – 2017-01-14
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    @pjs36: I think it is desired behavior. Desired Profit is measured in percent, so if you buy something for $5$ and sell for $5.26$ you make $5.26 \cdot 5\%$. Both of the $100$s should have percent signs attached to make the units come out right – 2017-01-14
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    @RossMillikan Got it, thank you. I didn't take the time to process the formula fully and assumed profit and costs were measured in dollars (or whatever denomination). – 2017-01-14

1 Answers 1

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First, desired profit is the markup rate. Note, since you are using 100 in this formula the market rate must be input as a percentage, not decimal. "100 - markup rate" does not have a name. I suppose you could call it the markup rate complement. Technically, that's what is its. Complementary percentages simply add up to 100%.

It might be helpful to see where the formula comes from. What you are looking for is a selling price that equals cost plus a percentage (the markup rate) of the selling price. Or:

$S = C + SM$

$S - SM = C$ (Solving for S)

$S(1-M) = C$

$S = \frac{C}{1-M}$

This is the same formula, but enter the markup rate as a decimal and you do not have to multiply by 100.