PHP calculate suggested price value - php

Question

I have below variable
quantity ($qty)
purchase price ($pp)
sale price ($sp)
commission 12% ($comm)
suggested sale price
the commission is calculated on the sale price for example if the sale price increase commission will increase too.
I want to calculate the Suggested sale price on a 10% profit ratio ($pr)
here is my code
$comm=12; //(commission 12%)
$pr=10; //(10% profit)
$percent = ((float)$sp/100)*(float)$comm;
$fees=round($percent,2);
$total=((float)$pp*(float)$qty)+(float)$fees;
$profit = ((float)$total/100)*(float)$pr;
$suggested = round(((float)$profit)+((float)$total),2);
I am calling this ajax function on button click, this will give few times different values on button click.
I think this is because when the sale price increase commission also increased based on that sale price.
there is no error in code only issue is it did't calculate correct value of sale price on first call, it need 2 or 3 calls to get correct value. how can I get correct value in first call.

Answer 1

First, a disclaimer: I’m a programmer, not an accountant.
So, thinking out loud for a few moments:
Define Terms
cogs: cost of goods sold (item cost)
sp: sales price
comm: commission
profit: profit
Formulas
profit = sales price - cogs - comm
profit = sales price * profitPercentage
comm = sales price * commPercentage
Substitute
sales price * profitPercentage = sales price - cogs - comm
For sake of example, let’s assume profit is 10% and commission is 15%
sales price * .10 = sales price - cogs - comm
we can then substitute commission
sales price * .10 = sales price - cogs - (sales price * .15)
Simplify
.1(sales price) = sales price - cogs - .15(sales price)
cogs = sales price - .1(sales price) - .15(sales price)
cogs = (1 - .1 - .15)(sales price)
cogs = (.75)(sales price)
sales price = cogs/.75
Test
cogs: $10
price: $13.33
comm: $2.00
profit: $1.33
Code
function calculateSalesPrice(float $cogs, float $commPercent, float $profitPercent) : float
{
$divisor = (1 - $commPercent - $profitPercent);
if($divisor <= 0) {
throw new Exception('Commission and Profit exceed 100%');
}
return round(($cogs/$divisor),2);
}
With this formula, both profit and commission use the sales price as their basis.