20% Markup on $40
Selling price, gross profit, gross margin — with full formula and industry context.
Selling Price
$48.00
Gross Profit
$8.00
Gross Margin
16.67%
$40 × 1.2 = $48.00
The Formulas
Selling price:
Cost × (1 + Markup/100)
Gross profit:
Price − Cost
Gross margin:
(Profit ÷ Price) × 100
Markup check:
(Price − Cost) ÷ Cost × 100
Step-by-Step
1
Convert to multiplier
1 + 20/100 = 1.2
2
Multiply by cost
$40 × 1.2 = $48.00
3
Gross profit
$48.00 − $40 = $8.00
4
Gross margin
$8.00 ÷ $48.00 × 100 = 16.67%
Industry Assessment: Low
Workable for high-volume, low-overhead businesses such as grocery, electronics, or commodity supply.
Real-World Context
Marking up a $40 cost item by 20% gives a $48 selling price — common in retail accessories or café products.
Frequently Asked Questions
What is 20% markup on $40?
A 20% markup on a $40 cost gives a selling price of $48.00, gross profit of $8.00, and a gross margin of 16.67%%. Formula: $40 × 1.2 = $48.00.
What is the difference between 20% markup and 20% margin?
20% markup means profit is 20% of the cost ($40). The equivalent gross margin — profit as % of selling price ($48.00) — is 16.67%%. Markup is always the larger number.
What gross margin does a 20% markup produce?
A 20% markup produces a 16.67% gross margin. Formula: Margin = Markup ÷ (1 + Markup/100) = 20 ÷ 1.2 = 16.67%.
How do I apply a 20% markup in a spreadsheet?
If cost is in A1: =A1*(1+20/100) gives the selling price. For a column: =A1*1.2 dragged down.
Need a different markup calculation?
Open Markup Calculator →