Question

Topic: Research/Metrics

Calculating Material Costs From List Price

Posted by jmh on 12/9/2011 at 5:21 PM ET 250 Points
I know what list price I want to sell my product, but how do I determine what the material cost should be if I want a 30% profit margin and pay a 10% commission?
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RESPONSES

  • Posted by crisanp on 12/10/2011 at 10:28 AM Accepted
    the sale price is production price and benefit. it is possible that you want to obligate the factory to produce at your prices.
    in that case , it is another discussion.
    for your case production price=list price/1.43
    for another doubts please contact me
    i`m onest when i tell that it is the first case when I hear this
  • Posted by koen.h.pauwels on 12/10/2011 at 1:19 PM Accepted
    Agreed with crisanp....i don't really get why you posted the question as it is simple math...is there more behind it?

    Carrie, i have to disagree with you on this one: maybe jmh has decided on the list price based on consumer willingness to pay (great way to start!) and is now working backwards to figure out how much the product can cost him to guarantee a certain margin. Marketing textbooks actually suggest doing it this way
  • Posted on 12/12/2011 at 8:35 PM Accepted
    Agree with crisanp and Koen. But I'll bet there's more behind the question than the simple math calculation.
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