Markup based on Selling Price-Math w/ Business Apps, Mathematics of Selling

Markup based on Selling Price-Math w/ Business Apps, Mathematics of Selling


In this section we’re going to look at
calculating markup based on selling price. In the previous section we worked
on markup based on cost, and now we’re going to look at markup based on selling
price. We use the same formula cost plus markup equal selling price except, when
we were working on markup based on cost. The base was on costs, and now
calculating markup based on selling price moves the base to the selling price.
Markup on costs is often used by manufacturers however, retailers often
compare business operations to sales revenue, and therefore oftentimes prefer
to use markup on selling price. So let’s take a look at calculating some markup
based on selling price problems. This first example we have items cost $185,
and it has a selling price of $250. Compute the percent markup on selling
price. Because the markup is on selling price
that dictates where the base, where the 100% is going, they’re asking us to find
the markup rate so we can plug in the rest of the information costs of $185, selling price of $250 since
we know two of the three values in this formula. We can calculate the markup
by subtracting the cost from the selling price we now have a dollar amount, and
given that we have a dollar amount this will act as the part that we then
can solve for the rate given our base of $250. So solving for a rate we take
part divided by base giving us a decimal, and converting that into a percentage
the markup rate based on selling price is 26%. In this next problem we have the
costs and selling price of an item and, the question is asking us what is the
percent markup based on selling price. Based on selling price tells us where the
100% in our base in this percentage problem is going to fall. We’re looking
for the markup percentage replacing costs and selling price with the values
given in the problem just like the last problem, because we know two of the three
values we can solve for the markup by subtracting the cost from the markup
leaving the difference of $239.50, and we now can solve for the
rate of the markup given we have a part, and using the base of this
problem. To solve for rate again we take part divided by base converting that
into a percentage we get a 22.7 percent markup. Here we have another problem that’s asking us to
determine the selling price were given the cost, and we’re told that the markup
rate is based on selling price using our foundation formula because it’s based on
selling price that’s where the 100%, and our base value will go. Their telling
us we have a markup rate of 40%, and we’re trying to find the selling
price. Before we use the item cost information we can solve for the
percentage that the cost is, in other words what + 40% gives us the total of 100
percent. That missing percentage is sixty percent, and that will help when we fill
in the rest of the information we’re looking for the base the only other
information we know is the cost which is going to be treated as a part given
that we know a rate associated with it which will allow us to solve for the
base. So we have our part the $209.95, and a rate looking for the base we will take
part divided by rate to calculate base, and the resulting answer for the selling
price of this item is $349.99. In this next problem very similar to the last
one were given a cost the markup rate is based on selling price and its 12%,
and the question is asking us what the selling prices. Using our foundation
selling price formula will fill in are percentages because it’s based on
selling price that’s the location of our base, and 100%. We’re given a markup rate of 12% because of the 100% location we know the base the other information
given is that the cost value is $3,560. To fill out this missing percentage
that then would give us a rate a part, and we could solve then for the base we
need to answer the question what plus 12% equals 100. Solving for the unknown
will subtract 12 percent from 100 which gives us 88%, and solving for the base we
take part divided by rate to give us our base or in this case the selling price
of $4,045.45. Here we have another example where we have the
markup given, and the percent markup based on selling prices 75%, and the
problem is asking us to determine the cost. To help us organize that
information we use our selling price formula plugging in the information
given because it’s based on selling price there’s are 100%. The percent markup
is 75% because of the 100% location on selling price that’s our base were given
a mark-up amount. We’re trying to find the cause but we
have two unknowns on our costs so the first step we need to do is to find our
base given that we have a rate and a part. So our first step for the base we will
take part divided by rate gives us a selling price of $4.20, and now that we know a markup
and a selling price we can determine our costs by taking the selling price minus
the markup will leave us with a cost of $1.05. In this next example
similar to the last one were given a markup, a percent markup based on selling
price, and they’re asking us for the cost. Plugging that information into our selling
price formula because markup is based on selling price that’s the location of
100%. The percent markup is 28%. 100% is our base location our markup is given. To
help us solve for the cost we can use this pair the rate and the part to help
us find the base. First base is calculated by taking part which is the
markup divided by the markup rate gives us a selling price of $102.68, and
once we have that we can take the selling price subtract the markup to
leave us with the cost $73.93.