Markup Formula for Cost Plus Calculations

When calculating cost plus amounts, the markup formula can be used, but can result in confusing results


By default, EBIS 5 will come with the markup formula enabled, which will use a more complex formula for calculating the markup over cost.  This option is set in All City Options > Master Parts section > Options.


If you take a part that costs $10.00, and use the markup formula and 30%, you get $14.29.  If you take off the 30% of 14.29, you get back to the original $10.00.  Without the markup formula, you would lose money.  $10.00 with 30% markup (no markup formula) = $13.00.  Then 30% back off gets you $9.10.  

Note that if using the markup formula, the maximum percentage you can use is 99.99% - anything more will result in a negative number due to the formula.


If using the markup formula, the calculation is: 

COST / (1-percent)

If not using the markup formula, the calculation is:

COST * (1 + percent)


In general, the markup formula is very polarizing: customers either absolutely require it, or prefer the simple cost + calculation.  The decision is up to how the business is run and what your customers prefer.