Markups and margins are used to add a profit margin to a cost, but they use a different formula to determine the profit margin.
For example, suppose a light fixture costs $900.00 and the markup is 20% and the margin is 20%.
Markup
To calculate the markup you would do the following formula: Cost x Markup >> $900.00 x 0.20 = $180.00
Based on this the 50% markup, the sell price of the fixture would be $900 + $180 = $1,080.00
Margin
To calculate the margin you would use the following formula: Cost / (1 - Margin) = $900 / ( 1 - .2) = $900 / .8 = $1,125.00
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