Truffle Nation Team Truffle Nation

23 Days Ago · 80 views

Does 100% profit mean a 100% markup or a 100% margin?

Home Bakery Business class-q-and-abakery-business

When pricing cakes or other bakery products, does '100% profit' mean doubling the total cost, or keeping the entire selling price as profit? For a product that costs ₹100 to make and sells for ₹200, how should the markup and profit margin be calculated? Which percentage belongs in the selling-price formula so that the two aren't confused?

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Truffle Nation Team Truffle Nation 23 Days Ago

Those are different percentages. Markup compares profit with cost; margin compares profit with selling price. With a total cost of ₹100 and a price of ₹200, profit is ₹100: a 100% markup, but a 50% margin.

The course selling-price formula uses margin: price = total cost ÷ (1 − margin). A 100% margin would make the denominator zero, so it cannot give a finite selling price when cost is positive. Decide which percentage you mean before using a formula.

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