diff --git a/erpnext/controllers/taxes_and_totals.py b/erpnext/controllers/taxes_and_totals.py
index d4a64f2e7f..57a41d1870 100644
--- a/erpnext/controllers/taxes_and_totals.py
+++ b/erpnext/controllers/taxes_and_totals.py
@@ -59,6 +59,10 @@ class calculate_taxes_and_totals(object):
 					item.rate = flt(item.price_list_rate *
 						(1.0 - (item.discount_percentage / 100.0)), item.precision("rate"))
 
+				if item.doctype in ['Quotation Item', 'Sales Order Item']:
+					item.total_margin = self.calculate_margin(item)
+					item.rate = item.total_margin if item.total_margin > 0 else item.rate
+					
 				item.net_rate = item.rate
 				item.amount = flt(item.rate * item.qty,	item.precision("amount"))
 				item.net_amount = item.amount
@@ -434,4 +438,18 @@ class calculate_taxes_and_totals(object):
 			self.doc.outstanding_amount = flt(total_amount_to_pay - flt(paid_amount), 
 				self.doc.precision("outstanding_amount"))
 		elif self.doc.doctype == "Purchase Invoice":
-			self.doc.outstanding_amount = flt(total_amount_to_pay, self.doc.precision("outstanding_amount"))
\ No newline at end of file
+			self.doc.outstanding_amount = flt(total_amount_to_pay, self.doc.precision("outstanding_amount"))
+
+	def calculate_margin(self, item):
+		total_margin = 0.0
+		if item.price_list_rate:
+			if item.pricing_rule: 
+				pricing_rule = frappe.get_doc('Pricing Rule', item.pricing_rule)
+				if not item.type: item.type = pricing_rule.type
+				if not item.rate_or_amount: item.rate_or_amount = pricing_rule.rate
+
+			if item.type and item.rate_or_amount:
+				margin_value = item.rate_or_amount if item.type == 'Amount' else flt(item.price_list_rate) * flt(item.rate_or_amount) / 100
+				total_margin = flt(item.price_list_rate) + flt(margin_value)
+
+		return total_margin