Mark up Pricing
Unit selling price = Cost + (markup rate X Cost)
= $1 + (.25 X $1.00)
= $1 + .25
= $1.25
Margin pricing
Selling Price = Cost / (1 - margin rate)
=$1.00/ (1 - .25)
=$1.00/.75
=$1.33
http://www.acq.osd.mil/dpap/contractpricing/vol1intro.htm
Laurie