BSM 200 Study Guide - Final Guide: Variable Cost
11 Apr 2015
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Markup % = selling price variable costs x 100. Margin % = selling price variable costs x 100. Cost: what it costs you to either make the product yourself or buy it directly from a manufacturer or from a wholesaler or other intermediary. Selling price: what you sell the product for (to a wholesaler, a retailer, a consumer) The manufacturer has certain costs (variable costs) associated with producing a product. A contribution margin is added to those costs and the total becomes the selling price to the wholesaler. The selling price to the wholesaler is the its variable cost. A contribution margin is added to those variable costs and the total becomes the selling price to the retailer. The selling price to the retailer is its variable costs. A contribution margin is added to those variable costs and the total becomes the selling price to the consumer. One person"s variable cost is another person"s selling price.
