Cost Calculator AI
Manufacturing & IndustrialProfit Margins

Manufacturing Profit Margin Calculator

Calculate gross manufacturing profit margins and operating profit margins by separating direct manufacturing costs from non-manufacturing SG&A expenses.

Wholesale Price & Manufacturing Cost Margin

Gross Margin
—%
Profit / Price
Gross Profit / Unit
—
Price - Cost
Equivalent Markup
—%
Profit / Cost
Batch 1k Profit
—
profit on 1,000 units

Gross & Operating Margin Formulas

Gross Margin (%) = [(Selling Price - Unit Manufacturing Cost) ÷ Selling Price] × 100
  • Unit Manufacturing Cost: Direct Materials + Direct Labor + Allocated Factory Overhead.
  • Gross Profit: Revenue minus Cost of Goods Sold (COGS).
  • Operating Profit: Gross Profit minus non-manufacturing SG&A (selling, marketing, corporate administration).

Step-by-Step Worked Example

Scenario: Selling an industrial valve for $50.00 with $30 manufacturing cost and $8 SG&A

Calculation Steps:

  1. Total Manufacturing Cost = $15 + $10 + $5 = $30.00 / unit
  2. Gross Profit = $50.00 - $30.00 = $20.00 / unit
  3. Gross Profit Margin = ($20.00 / $50.00) × 100 = 40.0%
  4. Operating Profit = $20.00 - $8.00 = $12.00 / unit
  5. Operating Profit Margin = ($12.00 / $50.00) × 100 = 24.0%
Result: Gross manufacturing profit margin is 40.0% ($20.00/unit). After SG&A expenses, operating profit margin is 24.0% ($12.00/unit).

How to Use This Calculator

  1. 1Enter unit selling price (wholesale or ex-factory).
  2. 2Input direct material, labor, and factory overhead per unit.
  3. 3Add selling, general, and administrative (SG&A) expenses per unit.

Assumptions & Limitations

  • Manufacturing costs include only plant-level production costs.
  • SG&A expenses are recognized as period expenses.

Frequently Asked Questions

What is a healthy gross profit margin for US manufacturers?

Typical US manufacturing gross profit margins range from 25% to 45%, depending heavily on industry capital intensity and whether the product is a commodity or high-precision engineered component.

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