the profit margin tab is just a margin between the two items average,this is not to be use for mark up..... the cost tab should be the cost-vat..then in the price field you use this formula...cost with out vat + mark up+vat
therfore eg. 100+25% mark up+ 15% vat= $143.25
if theres no vat ...use the cost field as the cost -the vat...then in the price tab use the cost price withouth the vat then add your mark up cost to it..thats all