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Exercise 7 · Price formation

Sales price formation (markup)

Price is not cost plus a percentage. Think of price as 100% and work backwards to find what it must be to cover all seven missions: cost, taxes, commission, fees, other variable costs, structure, and profit.

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1. The cost of the unit sold

CMV for retail, CPV for manufacturing, CSP for services. Include inbound freight, insurance, and losses — and remove recoverable taxes.

R$
R$

Optional — used to compare against the ideal price.

Optional — projects the monthly profit.

2. What leaves on every sale (% of price)

All percentages here apply to the selling price, never to the cost.

%

Effective rate of your tax regime.

%
%

Include the cost of advancing receivables.

%
%

Monthly fixed expenses ÷ expected monthly revenue × 100.

%

On the selling price. Owner's pay is not profit.

Total variable %
Sum of all percentages
Markup divisor (1 − sum)

3. The price, worked backwards

Ideal price (cost ÷ divisor)
Markup multiplier
Minimum price (zero profit)
Absolute floor (cost + variable only)
Contribution margin per unit
Contribution margin %
Profit per unit at current price
Profit % at current price
Maximum discount down to the minimum price
Projected monthly profit

Fill in the cost and the percentages to see the diagnosis.

How to read the result: the minimum price is the negotiation limit, not the target. Discounts below it hand your profit to the customer; below the absolute floor, every sale destroys cash.

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