Product Manufacturing Price Calculator
Calculate ex-factory wholesale prices and suggested retail MSRP by layering direct materials, labor, machine time, overhead, packaging, and target margins.
Target Margin Selling Price Model
Ex-Factory & MSRP Pricing Formula
Wholesale Price = Unit Cost ÷ (1 - Margin %); Retail MSRP = Wholesale Price × Keystone Multiplier (2.0×)- Unit Cost: Materials + Direct Labor + Machine Run Time + Allocated Overhead + Packaging.
- Ex-Factory Wholesale: Price charged by the manufacturer to distributors or retailers.
- Retail MSRP: Consumer price after standard retail keystone markups (typically 2.0x–2.5x wholesale).
Step-by-Step Worked Example
Calculation Steps:
- Total Unit Manufacturing Cost = $8 + $6 + $3 + $4 + $1 = $22.00
- Wholesale Price (40% Margin) = $22.00 / (1 - 0.40) = $36.67
- Manufacturer Profit = $36.67 - $22.00 = $14.67 / unit
- Suggested Retail MSRP (2.0×) = $36.67 × 2.0 = $73.33
How to Use This Calculator
- 1Enter material, labor, machine, overhead, and packaging cost components.
- 2Select pricing method (Target Gross Margin % or Target Markup %).
- 3Specify retail keystone multiplier (default 2.0x for standard retail distribution).
Assumptions & Limitations
- Excludes downstream distributor freight and retailer slotting allowances.
Frequently Asked Questions
What is keystone pricing in manufacturing distribution?
Keystone pricing is a standard retail practice where the retailer doubles the wholesale purchase price (100% markup / 50% gross margin) to set the consumer retail price (MSRP).
Related Cost Calculators
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Calculate target markup percentages on factory costs, determine ex-factory wholesale selling prices, and convert between markup and gross profit margin.