Cost-plus pricing

Cost-plus pricing sets a selling price by adding a percentage or fixed markup to a chosen cost base — typically full cost or variable cost — to recover all costs and earn a target return.

Also known ascost-plus

ByHoang TruongUpdated June 30, 2026

See it move

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A stacked bar shows a selling price of €100 constructed in two layers: a full-cost base of €80 at the bottom and a markup of €20 — representing 25% of the cost base — on top. The note explains that the same €100 price can be reached using a variable-cost base of €50 with a 100% markup rate, illustrating that the markup percentage is meaningful only when the cost base it is applied to is clearly specified.

Where it fits

SubjectCost AccountingCoreTopicPricing & Cost ManagementCore

The formula

LaTeX

P = C \times (1 + m)

Variables

$P$: Selling price (€)
$C$: Cost base (full cost or variable cost) (€)
$m$: Markup as a decimal (e.g. 0.25 for 25%) (—)