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Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Markup and Markdown
(continued)
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Markup = Selling price – Cost
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Try these examples
If an item sells for $20 and has a markup of
$12, what is the cost of the item?
Answer: $8
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the percent of markup based on the cost
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
A retailer can buy a shirt from a wholesaler
at $10.00.
The retailer will add $5.00 to the cost.
The retailer then sells it for $15.00.
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
P=RxB
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Rate of markup based on cost
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Five Step Solution Plan
1. What you know…
Rate of cost always equals 100%; MU and C values.
3. Solution plan
Rate of markup = MU divided by cost
4. Solution
Carry out operation
5. Conclusion
Add rate of MU to C to find rate of SP. Does it make sense?
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Substitute the known values
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Try these examples
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price when the cost and percent of
markup based on the cost are known
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Do these examples
Cost ? RC 100%
= SP ? = RSP 140%
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the cost by dividing the markup
amount by the markup rate
Cost = Markup
Markup rate
Cost = $6.50
40% [or 0.4]
Cost = $16.25
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Try these two examples
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the cost when the selling price and the
percent of markup based on cost are known
Cost ? RC 100%
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the cost by dividing the selling price
by the rate of the selling price
Cost = $ 20
150% (or 1.5)
Cost = $13.33
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Try these examples
Find the cost and markup of a bicycle
tire which sells for $18 and is marked
up 50% of the cost.
Answer: $12 and $6
(continued)
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
9.2 Markup based on selling price
and markup comparisons
(continued)
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the amount of markup
and the percent of markup
+Markup ? +Rate of ?
Markup
= Selling price $10 = Rate of 100%
Selling price
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the rate of markup by dividing the markup
by the selling price and multiplying it by 100%
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the amount of markup and the percent of
markup (based on SP ) for the following items:
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price when the amount
of markup and the percent of markup
based on the selling price are known
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the cost and selling price
if a handbag is marked up $5 with a
20% markup rate based on selling price
Cost ? RC ?
+ MU $5 +RMU 20%
= SP ? = RSP 100 %
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price and
the amount of the markup
SP = Markup
Rate of Markup based on selling price
SP = $5
20% or [0.2]
SP = $ 25
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price and
amount of markup based on
selling price for the following items:
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price when the
cost and the percent of markup
based on selling price are known
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price and markup for
a pair of jeans which costs the retailer $28
Cost $28 RC ?
+ MU ? + RMU 30%
= SP ? = RSP 100%
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
To find the selling price,
divide the cost by the rate of cost
SP = Cost
Rate of cost
SP = $28
70% [ = 0.7]
SP = $40
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price and markup (based
on selling price) for the following items:
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the cost when the selling
price and percent of markup
based on selling price are known
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the markup and cost of a box of pencils that sells
for $2.99 and marked up 25% of the selling price
Cost ? RC ?
+ MU ? +RMU 25%
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Compare the markup based on cost
with markup based on selling price
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
What is the difference?
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Converting a markup based on
selling price to a markup based on cost
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Converting a markup
based on cost, to a markup
based on selling price
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
9.3 Markdown, Series of
Markdowns and Perishables
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the amount of markdown,
the reduced (new) price and
the percent of the markdown
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the markdown and
rate of markdown
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
A lamp originally sold for $36 and is
marked down to sell for $30. Find the
markdown and rate of markdown.
$ %
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the final selling price for a series
of markup and markdowns
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the final selling price
Business Math, Eighth Edition © 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 07458 All Rights Reserved
Find the selling price for a desired
profit on perishable and seasonal goods