Calculation type: Comparing profit margin (a share of the selling price) with markup (a share of the cost).
Watch out: Margin and markup are NOT the same number. Margin is your profit as a percentage of the selling price, while markup is your profit as a percentage of the cost. The same $60 profit is a 40% margin but a 66.67% markup.
Formula explanation:
Profit = Selling price − Cost = $150 − $90 = $60
Profit margin = Profit / Selling price × 100 = $60 / $150 × 100 = 40%
Markup = Profit / Cost × 100 = $60 / $90 × 100 = 66.67%