The second thing this process does is recalculate the selling price based on the margin and unit cost. After it does this recalculation, it compares the newly calculated selling price with the old selling price. If the new selling price is higher than the old selling price, it records the new higher selling price in the file. If the new price is lower than the old price, the old price is retained. This feature prevents your selling price from being lowered after a purchase has been made at a lower than usual price.
The selling price is recalculated by first dividing the margin percentage by 100 to get it into the decimal form and then subtracting the decimal form from one. The result is divided into the average unit cost. If the price is over 9¢, it is rounded to the nearest penny.
To continue the example above, the margin percentage for product A is 40. The price is calculated as follows:
price = unit cost / (1 - (margin/100))
2.53 = 1.57 / (1 - (40/100))
If 2.53 is greater than the current selling price, it becomes the new price.
If you do wish to lower the price of a product, it can be done in one of two ways.
1. Manually enter the new price on the Product screen.
2. Use the Product screen to set the price to 0.00, and then re-run the repricing process.
The second method has the advantage of not having to calculate the new price manually.