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Mar 09, 2015

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business math

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72 visualizzazioni22 paginebusiness math

© All Rights Reserved

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GOALS

Calculate cost and selling price when

markup is based on selling price

Calculate the rate of markup based on

cost

Calculate markdown and selling price

BUSINESS MATH

Thomson/South-Western

Lesson 12.4

Slide 1

Selling Price

Businesses have to decide what price to

charge for an item.

The price must cover the cost of the item, all

expenses, including overhead, and generate

a profit.

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

One way businesses price items is to use

markup pricing.

With markup pricing, an amount is added to

the cost of the goods to cover all other

expenses plus a profit.

This is known as the markup or margin.

The selling price is the price at which the item

is actually sold.

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

Price Lines

Retailers often sell goods in price lines.

The different price lines are expected to

appeal to the different needs of buyers.

For example, an auto supply store may stock

three price lines of car batteries.

One price line sells for $79.99; another line sells

for $69.99; a third line sells for $59.99.

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

Price Lines

(continued)

price line, such as $59.99, the selling price is

already known.

The problem is to find the highest price the

retailer can pay for the batteries and still get

the markup it wants.

If the cost of the batteries is too high, the

retailer will make too little profit in selling

them.

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

While many businesses use the selling price

to figure markup, others use the cost.

When the cost price is used, you find the rate

of markup by dividing the markup by the cost.

Rate of Markup = Markup Cost

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

Markdown

In some cases, retailers reduce prices by

applying a markdown to their marked price, or

original selling price.

The marked price is the price that is marked on

the item.

The selling price is always the price the item

actually sold for.

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

A markdown may be taken on the marked

price at the end of a season or on items that

are not selling well.

Markdowns might also be done to attract

customers to the store for a sale or to be

more competitive.

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

Markdown Formulas

Markdown, which is also known as discount,

is stated as a percentage of a marked price.

Rate of Markdown Marked Price = Markdown

Marked Price Markdown = Selling Price

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

buying a travel alarm clock for a line that sells

at $11.98. What is the most that you can pay for

the clock and maintain a markup of 45% of the

selling price?

0.45 $11.98 = $5.391, or $5.39 markup

$11.98 $5.39 = $6.59 cost

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

for $64.89. What is the most that you can pay for

the binoculars and make a markup of 34% on

the selling price?

0.34 $64.89 = $22.062, or $22.06 markup

$64.89 $22.06 = $42.83 cost

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

tape. What is the selling price of the measuring

tape with a markup of 60% on selling price?

100% 60% = 40% cost as a percent of

selling price

$2.50 40% = $2.50 0.4 = $6.25 selling price

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

is the selling price of the rice if a storeowner

wants a markup of 24% on selling price?

100% 24% = 76% cost as a percent

of selling price

$1.10 76% = $1.10

$1.10 0.76 = $1.447, or $1.45 selling price

$1.45 x .24 = .348 35 cents 1.45 - .35 = 1.10

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

faucets at $80 each, less 20% and 10%. The

store sells them at $90. a. How much does the

stores markup each? b. What percent is this of

the selling price?

a. 80% 90% = 0.8 0.9 = 0.72, or 72%

invoice price as percent of list price

0.72 $80 = $57.60 invoice price

$90 $57.60 = $32.40 markup amount

b. $32.40 $90 = 0.36, or 36% markup percent

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

retailer wants to sell the racer for $83.65. What

rate of markup based on cost will the retailer

use?

$83.65 $47.80 = $35.85 markup

$35.85 $47.80 = 0.75, or 75% rate of markup

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

8:00 a.m. get a 15% discount on all clothing. a.

For a jacket marked at $59, what discount will

an early shopper get? b. What is the jackets

selling price after the discount is taken?

a. 0.15 $59 = $8.85 early shopper discount

b. $59 $8.85 = $50.15 selling price

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

account customers get an extra 20% off on

purchases of household items. The price of

blankets with a marked price of $35 will be

reduced by a 15% discount taken at the

register. a. What is the blankets reduced price,

after the markdown? a. What is the blankets

selling price to a charge account customer?

a. 0.15 $35 = $5.25 markdown

$35 $5.25 = $29.75 price after markdown

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

account customers get an extra 20% off on

purchases of household items. The price of

blankets with a marked price of $35 will be

reduced by a 15% discount taken at the

register. a. What is the blankets reduced price,

after the markdown? a. What is the blankets

selling price to a charge account customer?

b. 0.2 $29.75 = $5.95 discount for charge

account customers

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

account customers get an extra 20% off on

purchases of household items. The price of

blankets with a marked price of $35 will be

reduced by a 15% discount taken at the

register. a. What is the blankets reduced price,

after the markdown? a. What is the blankets

selling price to a charge account customer?

$29.75 $5.95 = $23.80 selling price to charge

customers

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

$175 each, less 40%. Cronin marked the tool set to sell at

$200. At a sale, the tool set was sold for 20% off the

marked price. a. What was the invoice price of the tool

set? b. What was the sale price? c. On each set sold at

the sale, what was the amount the store made as

markup? d. The markup was equal to what percent of

the selling price, rounded to the nearest percent?

$175 $70 = $105 invoice price

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

$175 each, less 40%. Cronin marked the tool set to sell at

$200. At a sale, the tool set was sold for 20% off the

marked price. a. What was the invoice price of the tool

set? b. What was the sale price? c. On each set sold at

the sale, what was the amount the store made as

markup? d. The markup was equal to what percent of

the selling price, rounded to the nearest percent?

$200 $40 = $160 sale price

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

$175 each, less 40%. Cronin marked the tool set to sell at

$200. At a sale, the tool set was sold for 20% off the

marked price. a. What was the invoice price of the tool

set? b. What was the sale price? c. On each set sold at

the sale, what was the amount the store made as

markup? d. The markup was equal to what percent of

the selling price, rounded to the nearest percent?

d. $55 $160 = 0.343, or 34% markup as a

percent

BUSINESS MATH

Thomson/South-Western

Lesson 12.

Slide

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