In this example, increasing current assigned cost from 600 to 660 changes the result from 925.7143 to 1,018.2857 . All other inputs stay the same.
Try this with your own numbersFormula and worked example
New price = cost × (1 + increase) / (1 − margin)
| Input | Example |
|---|---|
| Current assigned cost | 600 |
| Cost increase | 8 % |
| Required margin | 30 % |
| Calculated result | 925.7143 |
Choose reliable inputs
Account for delivery time, review work and when you expect to be paid for each engagement. For this consulting firm calculation, use time sheets, engagement scopes and invoice ageing and a consistent definition of one engagement.
- Delivery hours: include the portion belonging to this engagement or reporting period, and record where the value came from.
- Preparation: include the portion belonging to this engagement or reporting period, and record where the value came from.
- Travel: include the portion belonging to this engagement or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
How much should price change when costs rise?
Enter a weighted increase across the costs included. This is a target-margin calculation, not a demand forecast.
What if this input changes?
If current assigned cost rises by 10%, this example changes by 92.5714 . This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.