A calculator can be exact about the numbers supplied and still be incomplete for a real business decision. MarginCalc deliberately treats cost as one user-defined direct-cost amount. This keeps the formula transparent and makes omitted assumptions visible rather than pretending to know an accounting policy.
Choose a direct-cost boundary before entering the number
For a purchased item, direct cost might be its supplier price plus inbound freight. For a made item, it might include materials and directly attributable labor. MarginCalc does not combine line items; it uses the single total you decide is the relevant cost for this gross comparison.
Do not read omitted costs into the result
Rent, salaries not assigned to the unit, advertising, payment fees, marketplace commissions, taxes, shipping to the customer, returns, and financing are not added automatically. If they matter, incorporate them into your chosen cost or use a more complete model before acting.
A negative result is information, not a recommendation
When selling price is below entered cost, gross profit, margin, and markup are negative. MarginCalc shows that loss instead of rejecting it. The calculation proves only the relationship between those two amounts; it cannot judge whether a temporary loss, promotion, or strategic price is appropriate.