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

Recommended Price
—
Cost / (1 - Margin)
Profit Dollar / Unit
—
Price - Cost
Implied Markup
—%
on top of mfg cost

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

Scenario: Pricing a manufactured consumer hardware gadget

Calculation Steps:

  1. Total Unit Manufacturing Cost = $8 + $6 + $3 + $4 + $1 = $22.00
  2. Wholesale Price (40% Margin) = $22.00 / (1 - 0.40) = $36.67
  3. Manufacturer Profit = $36.67 - $22.00 = $14.67 / unit
  4. Suggested Retail MSRP (2.0×) = $36.67 × 2.0 = $73.33
Result: Total manufacturing cost is $22.00. Suggested wholesale price is $36.67 (40% margin) and suggested retail MSRP is $73.33.

How to Use This Calculator

  1. 1Enter material, labor, machine, overhead, and packaging cost components.
  2. 2Select pricing method (Target Gross Margin % or Target Markup %).
  3. 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

Manufacturing Cost Calculator

Calculate total manufacturing cost by breaking down direct materials, direct labor, and manufacturing overhead into prime and conversion costs.

Manufacturing Profit Margin Calculator

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

Manufacturing Markup Calculator

Calculate target markup percentages on factory costs, determine ex-factory wholesale selling prices, and convert between markup and gross profit margin.