Recent Articles

Difference between Markup and Margin

These two terms are often confused with each other. Markup is an inventory term, sometimes only used when discussing costs and is a function of costs; margin is a profit and loss statement term and is a function of sales.

Definition of Contribution Margin

04/06/2013

Contribution margin is a core business concept and is often used in cost accounting to identify the amount of financial contribution a sold product provides to the company.  Simply put, contribution margin is the sales price less the direct costs [...]

What is ‘Cost of Goods Sold’?

12/20/2012

Simply put, ‘cost of goods sold’ equals the direct costs of materials, human resources, and equipment needed to produce the item sold.  However, this can be confusing because there are many marginal cost items that affect the real cost of [...]

What is the Difference between Markup and Margin?

12/08/2012

Mark Up Calculator It is amazing how one simple formula can be so confusing to the average business owner.  The formula is markup.  It is defined as the dollar amount or percentage of the cost of the item added to the item to equal its sales [...]