Business Math

Quarter 1 – Module 8:
Differentiating
Mark-up from Margins
Business Math – Grade 11
Alternative Delivery Mode
Quarter 1 – Module 8: Differentiating Mark-up from Margins
First Edition, 2020

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 Business Math
Quarter 1 – Module 8:
Differentiating
Mark-up from Margins
Introductory Message
For the facilitator:

Welcome to the Business Math – Grade 11 Alternative Delivery Mode (ADM)

Module on Differentiating Mark-up from Margins!

This module was collaboratively designed, developed and reviewed by

educators both from public and private institutions to assist you, the teacher or

facilitator in helping the learners meet the standards set by the K to 12 Curriculum

while overcoming their personal, social, and economic constraints in schooling.

This learning resource hopes to engage the learners into guided and

independent learning activities at their own pace and time. Furthermore, this also

aims to help learners acquire the needed 21st century skills while taking into

consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the

body of the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this

module. You also need to keep track of the learners' progress while allowing them to

manage their own learning. Furthermore, you are expected to encourage and assist

the learners as they do the tasks included in the module.

For the learner:

Welcome to the Business Math – Grade 11 Alternative Delivery Mode (ADM)

Module on Differentiating Mark-up from Margins!

Business Math is a mathematical tool intended to deliver an utmost

understanding about money and information needed to make good financial
decisions. It does not only concentrate on the essentials of business finances, such
as owning or operating a business, but it also provides an avenue where people in
every walks of life learn the significance of managing their personal finances. Getting
familiar with the concepts of Business Math leads to making a better decision with
your money!

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning resource while being an active
learner.

This module has the following parts and corresponding icons:

What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.

What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.

What’s In This is a brief drill or review to help you link

the current lesson with the previous one.

What’s New In this portion, the new lesson will be

introduced to you in various ways such as a
story, a song, a poem, a problem opener, an
activity or a situation.

What is It This section provides a brief discussion of the

lesson. This aims to help you discover and
understand new concepts and skills.

What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.

What I Have Learned This includes questions or blank

sentence/paragraph to be filled into process
what you learned from the lesson.

2
 What I Can Do This section provides an activity which will
help you transfer your new knowledge or skill
into real life situations or concerns.

Assessment This is a task which aims to evaluate your

level of mastery in achieving the learning
competency.

Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of the
lesson learned. This also tends retention of
learned concepts.

Answer Key This contains answers to all activities in the

module.

At the end of this module you will also find:

References This is a list of all sources used in developing

this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.

If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are
not alone.

We hope that through this material, you will experience meaningful learning and
gain deep understanding of the relevant competencies. You can do it!

3
 What I Need to Know

This module is made to help you establish a better understanding in mark-up

and margins and differences with each other.

Our goal in this module is to help you analyze on the identifying mark-up from
margins. Together, we will study and analyze each problem.

At the end of this module, you are expected to:

1. Differentiate mark-up from margins. (ABM_BMIIBS-Ih-3)

What I Know

DIRECTIONS: On a separate sheet of paper, write only the letter corresponding to

your final answer. Do not write anything on the module.

1. It is obtained by subtracting the cost of the goods with its sales.

A. Markdown C. Margin
B. Mark-on D. Mark-up

2. The amount that is being added to the cost in determine the selling price.
A. Mark-up C. Expense
B. Markdown D. Margin

3. It is expressed as the percentage of sales.

A. Mark-on C. Markdown
B. Mark-up D. Margin

4. It is expressed as a percentage of cost.

A. Mark-up C. Margin
B. Markdown D. Mark-on

5. Fred sells a bag for ₱850. The cost for each bag is ₱650. What is its margin
percentage?
A. 35% C. 23.53%
B. 30.77% D. 18.27%

4
6. In item number 5, what is the mark-up rate of the bag based on the cost?
A. 30.77% C. 18.37%
B. 28.25% D. 12.53%

7. The cost of a pair of shoes is ₱2,500. What is its margin if it is sold at ₱3,200?
A. ₱500 C. ₱660
B. ₱700 D. ₱550

8. Julie bakes bread and sold it for ₱50 per loaf. If each loaf cost ₱38, what is the
rate of margin?
A. 31. 58% C. 25.88%
B. 24% D. 30%

9. What is the rate of mark-up of a keyboard if its selling price is ₱12,000 and a
cost that is 80% of the selling price?
A. 30% C. 27%
B. 45% D. 25%

10. What is the rate of margin in item number 9?

A. 18% C. 20%
B. 29% D. 25%

11. Mica is selling branded clothes. If the cost of a cloth is ₱780 and she sold it for
₱950, how much is the amount of mark-up that she put based on the cost?
A. ₱170 C. ₱120
B. ₱230 D. ₱130

12. A bookstore priced a book at ₱150. If the cost of the book is ₱85. What is the
margin rate?
A. 33.33% C. 28.35%
B. 25.25% D. 43.33%

13. A basketball ball cost ₱2,800 and was sold on a mall at ₱3,500. How much is
the mark-up?
A. ₱650 C. ₱455
B. ₱700 D. ₱560

14. What is the rate of mark-up in item number 13?

A. 55% C. 25%
B. 50% D. 20%

15. What is the margin rate of the basketball ball in item number 13?
A. 20% C. 45%
B. 30% D. 65%

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 Good job on our pre-assessment!

This is just a preview of our lesson. We will be

discussing new concepts on this module.

Keep going!

Lesson
Differentiating Mark-up
1 from Margins
On a business owner, obtaining a profit is necessary to sustain his business.
Thus, there are different aspect that he needs to evaluate to make a reasonable
pricing for his business.

The concept of mark-up and margin is essential in identifying whether there

is a profit or a loss in your business. Meanwhile, we will be studying these concepts
on this module to have a better understanding on the difference between mark-up
and margins.

What’s In

On the previous module, we have already discussed the concept of mark-up so let us
have a short review for this topic.

DIRECTIONS: Read the problem carefully. On a separate sheet of paper, write your
answers to the questions below. Do not write anything on the module.

A pastry house is selling a pancake for ₱50 each. The cost of each pancake is ₱36.

1. How much is the mark-up price of each

pancake?
2. What is the rate of the mark-up?
3. If the owner of the pastry house wants to
have a 20% mark-up, how much would be
the selling?
4. How much is mark-up is put on the
pancake?

7
 What’s New

DIRECTIONS: Below is an upside-down word puzzle. On a separate sheet of paper,

copy the puzzle and mark the words which are related in business.

Good job on doing the exercises!

You will encounter these words on our discussion of the

difference between the mark-up and the margin.

Stay focus and learn!

What is It

As mentioned on our previous module, a mark-up is used to cover the cost of

the business to obtain a profit. It is the amount that is being added to the cost to
determine the selling price of an item.

8
 On the other hand, a margin is the amount obtained by subtracting the cost
and expenses from the total sales.

The mark-up and margin may be the same in numerical value, but they
differ in the percentage of each.

Let’s elaborate more on the differences between these two concepts.

EXAMPLE 1

A mirror costs ₱45 and was sold at a price of ₱80. Find the rate of mark-up
and margin.

Solution: To solve the mark-up,

Mark-up = Selling Price – Cost = ₱80 - ₱45 = ₱35

To solve the margin,

Margin = Sales – Cost = ₱80 - ₱45 = ₱35

Notice that the mark-up and the margin give the same result of ₱35. But we
can see their difference if we calculate for the rate of mark-up and margin below.

The mark-up rate can be also be computer as,

𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒−𝐶𝑜𝑠𝑡
Mark-up Rate = x 100
𝐶𝑜𝑠𝑡

₱80−45
Mark-up Rate = x 100
₱45

𝑴𝒂𝒓𝒌 − 𝒖𝒑 𝒓𝒂𝒕𝒆 = 𝟕𝟕. 𝟕%

However, for the marginal rate, we have

𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒−𝐶𝑜𝑠𝑡
Margin Rate = x 100
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒

₱80−₱45
Margin Rate = x 100
₱80

9
 𝑴𝒂𝒓𝒈𝒊𝒏 𝒓𝒂𝒕𝒆 = 𝟒𝟑. 𝟕𝟓%

We can see that the mark-up rate is greater than the rate of the margin. This
is because for the mark-up rate, we divide the mark-up with the cost and for the
margin rate, we divide it with the sales. The mark-up rate must always be higher
than the margin rate to prevent a loss in the business.

The mark-up rate implies the percentage that you add to your cost to
determine your selling price. While margin rate implies the percentage, which is left
for you after paying all the cost and expenses of your business.

In the point of view of a business owner, it is important for them to monitor

the percentage of the sale price to see their profit. The margin is often called as the
gross profit margin. On the other hand, the mark-up also pertains to the profit but
at the perspective of a customer wherein it denotes cost multiplier.

EXAMPLE 2

A merchandising store priced a large storage box at ₱650. If the cost is ₱580.

a. How much is the mark-up?

b. What is the rate of mark-up?
c. What is the rate of mark?

Solution:

a. Mark-up = ₱650 − ₱580

𝑴𝒂𝒓𝒌 − 𝒖𝒑 = ₱𝟕𝟎

₱650−₱580
b. Mark-up Rate = x 100
₱580

𝑴𝒂𝒓𝒌 − 𝒖𝒑 𝒓𝒂𝒕𝒆 = 𝟏𝟐. 𝟎𝟕%

₱650− ₱580
c. Margin Rate = x 100
₱650

𝑴𝒂𝒓𝒈𝒊𝒏 𝒓𝒂𝒕𝒆 = 𝟏𝟎. 𝟕𝟕%

10
 EXAMPLE 3

An office table cost ₱2,100 and was sold at a price of ₱3,600.

a. How much is the mark-up?

b. What is the mark-up rate?
c. What is the rate of margin?

Solution:

a. Mark-up = ₱3,600 − ₱2,100

𝑴𝒂𝒓𝒌 − 𝒖𝒑 = ₱𝟏, 𝟓𝟎𝟎

₱3,600−₱2,100
b. Mark-up Rate = x 100
₱2,100

𝑴𝒂𝒓𝒌 − 𝒖𝒑 𝒓𝒂𝒕𝒆 = 𝟕𝟏. 𝟒𝟑%

₱3,600− ₱2,100
c. Margin Rate = x 100
₱3,600

𝑴𝒂𝒓𝒈𝒊𝒏 𝒓𝒂𝒕𝒆 = 𝟒𝟏. 𝟔𝟕%

EXAMPLE 4

The manufacturing cost of a teddy bear is ₱365. They want to earn a margin
of ₱90 on it. What is the rate of mark-up?

₱90
Solution: Mark-up Rate = x 100
₱365

𝑴𝒂𝒓𝒌 − 𝒖𝒑 𝒓𝒂𝒕𝒆 = 𝟐𝟒. 𝟔𝟔%

EXAMPLE 5

Peter sells face mask for ₱400 per box. The cost of the box is 80% of the selling
price. What is the margin rate?

11
 ₱400−0.80(₱400)
Solution: Margin Rate = x 100
₱400

₱400−₱320
Margin Rate = x 100
₱400

𝑴𝒂𝒓𝒌 𝑹𝒂𝒕𝒆 = 𝟐𝟎%

That’s it! We’re done discussing the difference between

mark-up and margin, and how we compute their rate.

Next activities are prepared for you! Let’s answer it!

What’s More

DIRECTIONS: On a separate sheet of paper, copy and complete the table below. The
first row is done for you. Round off your answer to the nearest
hundredths.

Mark-up/ Mark-up Margin

Cost Selling Price
Margin Rate Rate

₱450 ₱560 (₱110) (24.44%) (19.64%)

₱325 ₱480 (1) (2) (3)

₱2,050 ₱2,580 (4) (5) (6)

₱9,540 ₱10,900 (7) (8) (9)

₱15,352 ₱16,000 (10) (11) (12)

₱350,00 ₱370,000 (13) (14) (15)

12
 What I Have Learned

Surely, the discussion above gave you a better

understanding of the week’s lesson.

Now, let me check if you can still recall the discussion on

differentiating mark-up from margin.

DIRECTIONS: Using a Venn diagram, present the relationship

between mark-up and margin. On a separate sheet of paper, write only
the letter of the characteristics to which they belong.

a. Expressed from the seller’s perspective.

b. Expressed from the buyer’s perspective.
c. Numerical Value or Amount.
d. Amount added to the cost to determine the selling price.
e. Amount obtained from the selling price after subtracting the cost.

MARK-UP MARGIN
(1) (5) (3)
(2) (4)

What I Can Do

DIRECTIONS: Read and analyze the problem below. On a separate sheet of paper,
write your answers to the following questions.

Suppose you are asked to make a food stall for the school fair. You need to
make a business plan for that.

13
1. What product do you want to sell?

2. What is your estimated cost for the product?

3. What is your desired selling price for the product?

4. How much margin do you want to earn?

5. What would be your mark-up rate for that?

6. What would be your margin for the product?

Great job!

Now, let’s us see whether you really learn something

from our discussion by taking this evaluation.

Goodluck!

Assessment

A. DIRECTIONS: Read the following statements below and determine whether it

defines mark-up or margin. On a separate sheet of paper, write MU if it is mark-
up and MG for margin.

1. It is the percentage of the selling price.

2. The amount added to the cost to determine the selling price.

3. It is expressed from the perspective of the seller.

4. The percentage left after paying the expenses and cost of the business.

5. Its rate is based on the cost of the business.

B. DIRECTIONS: Read the and analyze each problem below. On a separate sheet
of paper, write the letter that corresponds to your answer.

14
Problem: Mr. Lopez sells a ream of bond paper for ₱250. The cost of each ream
is ₱230.

6. What is the rate of the mark-up?

A. 10% B. 20% C. 8.7% D. 7.5%

7. What is the rate of the margin?

A. 20% B. 8% C. 12% D. 15%

Problem: Alice is considering of starting an online business. The cost of her skirt
is ₱220. She wants a margin of ₱80 for every skirt.

8. How much is the selling price of each skirt?

A. ₱220 B. ₱300 C. ₱250 D. ₱280

9. What is the rate of mark-up?

A. 36.36% C. 33.33%
B. 24.44% D. 25.90%

10. What is the rate of margin?

A. 12.56% C. 25.57%
B. 34.44% D. 26.67%

Problem: A sunglass costs ₱400. The margin is 20% of the cost.

11. How much is the selling price of the sunglass?

A. ₱500 B. ₱600 C. ₱480 D. ₱550

12. What is the rate of margin?

A. 16.67% C. 36.67%
B. 15.30% D. 33.33%

Problem: Mrs. Dalupan is sewing school uniforms. The cost for each pair of
school uniform is ₱630. She is considering of having a margin of ₱250.

13. How much is her desired selling price for the school uniform?
A. ₱880 B. ₱750 C. ₱980 D. ₱700

14. What is the mark-up rate?

A. 34.78% C. 35.50%
B. 39.68% D. 29.90%

15. What is the rate of the margin?

A. 27.69% C. 32.61%
B. 25.45% D. 28.41%

15
 Additional Activities

DIRECTIONS: Read and analyze the problems below. On a separate sheet of paper,
write your solutions and answers to the questions. Do not write
anything on the module.

1. An appliance center priced an air conditioner unit at ₱14,000. The cost and
operating expenses of the unit is ₱12,300.

a. What is the mark-up rate?

b. What is the rate of margin?

2. A branded watch costs ₱9,300 was sold at 15% of the cost.

a. How much is the selling price of the watch?

b. What is the margin rate?

Congratulations!

We have successfully accomplished our mission for

this module!

I will see you on our next module!!

7
 8
of-pancakes/.
"Stack Of Pancakes". Denny's, 2020. https://www.dennys.com/food/sides/stack-
Quezon City: Vibal Group, Inc.
Lopez, B., Martin-Lundag, L. and Dagal, K., 2016. Business Math (Textbook).
Manual). Quezon City: Vibal Group, Inc.
Lopez, B., Martin-Lundag, L. and Dagal, K., 2016. Business Math (Teacher's
References
WHAT I KNOW WHAT’S IN WHAT’S MORE
1. C 1. ₱14 1. ₱155
2. A 2. 38.89% 2. 47.69%
3. D 3. ₱43.2 3. 32.29%
4. A 4. ₱7.2 4. ₱530
5. C 5. 25.85%
6. A 6. 20.54%
7. B 7. ₱1,360
8. B 8. 14.26%
9. D 9. 12.48%
10. C 10. ₱648
11. A 11. 4.22%
12. D 12. 4.05%
13. B 13. ₱20,000
14. C 14. 5.71%
15. A 15. 5.41%
WHAT I HAVE ASSESSMENT ADDITIONAL
LEARNED ACTIVITY
1. MG
1. B 2. MU 1. 13.82%
2. D 3. MG 2. 12.14%
3. C 4. MG 3. ₱10,695
4. A 5. MU 4. 13.04%
5. E 6. C
7. B
8. B
9. A
10. D
11. C
12. A
13. A
14. B
15. D
Answer Key
For inquiries or feedback, please write or call:

Department of Education – Region III,

Schools Division of Bataan - Curriculum Implementation Division
Learning Resources Management and Development Section (LRMDS)

Provincial Capitol Compound, Balanga City, Bataan

Telefax: (047) 237-2102

Email Address: bataan@deped.gov.ph