SHS

Business Mathematics
Quarter 1, Week 5 – Module 6
Differentiating Mark-on, Mark
down and Mark-up
ABM_BM11BS-Ig-1

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Business Mathematics- SHS
Quarter 1, Week 5- Module 6: Differentiate the Mark-on, Mark-down and
Mark-up given Price of a Product

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Regional Director: Gilbert T. Sadsad
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Development Team of the Module

Writer: EMMYLOYD C. BIERSO, ABM Teacher, TNHS
Editors: NERISSA A. MORTEGA, HT III, San Lorenzo NHS
JULMA B. CARGULLO, MT, TNHS
HILDA J. CARLET, MT, TNHS
Language Editors: CHERRY BASILLA, TNHS
DESIREE CANICULA, TNHS
Reviewers: DIOLETA B. BORAIS , EPS, Tabaco City
JINKY VILLAREAL, EPS, Iriga City
JONJON MONTER ,Principal, Sagrada HS, Iriga City
LOYD BOTOR, EPS, RO V
Layout Artist: ROWENA B. BENOYO, San Lorenzo NHS

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 Business Mathematics- SHS
Quarter 1 – Week 5- Module 6
Differentiate the Mark-on, Mark-down and Mark-up given Price of a Product

I. Introduction

Look around your community. There are many business

establishments that you can see, from a simple sidewalk vendor, and a sari-
sari store, to an establishment that caters the wide needs of the people. But
have you ever thought how they set up the prices of their products? You
should be aware that the right price must be set up for the product, and
customers must be satisfied with the reasonable price.
This module will help you understand more about setting up prices of
products.

This module is composed of one lesson with three learning activities:

Learning Activity # 1- Defining Mark-on

Learning Activity # 2- Defining Markdown
Learning Activity # 3- Defining Mark-up

II. What Will You Learn From This Module?

After this module, you should be able to:

● Differentiate mark-on, markdown and mark-up

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III. Vocabulary List
• Cost - refers to the purchase price of an article. It is the price at
which stores/traders buy the product.
• Initial mark up/mark-on - refers to the amount added to the cost to
arrive at the original selling price
• Additional mark-up - refers to amount added to the original selling
price to arrive at a new selling price.
• Mark-up - the amount by which the cost of a product is increased in
order to derive the selling price.
• Mark-up cancellation - refers to the decrease in the selling price;
it does not decrease below the original selling price.
• Markdown - refers to reduction in the original selling price

IV. PRETEST
Answer the following questions and show your computation in good form.
1. An item costs P 2,000.00. Assume an original selling price of
P 2,500. The selling price was raised to P 2,700.00. It was later on
tagged to sell at P 2,400.00.
Compute for the following:
A. Initial Mark-up C. Mark-up
B. Additional Mark-up D. Markdown

2. Emily bought a product at P 520.00. Assume an original selling

price of P 570.00. The selling price was raised to P 600.00. Then,
he finally decided to sell the product at P 550.00. Compute for
the following:
A. Cost C. Additional mark-up E. Markdown
B. Initial mark-up D. Mark-up

3. Mae sold an item at an original selling price of P 600.00. She

earned a mark-on of P 60.00 from the item sold. Later, she decided
to increase the price to P 620.00. But it was later on tagged to sell
at P 580.00.
Compute the following.
A. Cost C. Additional mark-up E. Markdown
B. Initial mark-up D. Mark-up

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 How do you find the test? Perhaps many of you are thinking that mark-on,
mark-up is simply adding an amount to the cost to come up with the selling
price. Well that is correct, but the purpose of this module is for you to
understand more of this. Let’s now begin the discussion.

V. Learning Activities

Learning Activity No.1

A. Ana bought a bag worth P1,800.00. She decided

to sell it with a mark-on of P360.00. How much will
she sell the bag?

B. If Ana wants an additional of P340.00 based on the

original selling price, how much will be her new selling price?
C. How much will be the reduced selling price if Ana
will cancel P 250.00 based on the new selling price?
D. What is the markdown if Ana reduced the original
selling price to P2,000.00?

To facilitate the discussion, each situation in the above problem represents

a topic. Let’s now begin.

MARK-ON AND ADDITIONAL MARK-UP

A. Ana bought a bag worth P1,800.00. She decided to sell it with a mark-
on of P360.00. How much will she sell the bag?

• In the above exercise the P1,800.00 worth of bag that Ana bought
is called the Cost. It refers to the purchase price of an article.
➢ Initial Mark-up or mark-on refers to the amount added to cost
to arrive at the original selling price. This is shown when Ana
decided to sell the bag with a mark-on of P 360.00. In order for
you to get the selling price of the bag, you just simply add the mark-
on to the cost.
Cost P 1,800.00
Plus: Mark-on 360.00
Original selling price P 2,160.00
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 B. If Ana wants an additional of P340.00 based on the original selling
price, how much will be her new selling price?

➢ Ana wants to increase the original selling price of P2,160.00. This increase is
called Additional Mark-up. It refers to the amount added to the original
selling price to arrive at a new selling price. To get the new selling price, you
add the additional mark-up to the original selling price that we got from letter A.
Original selling price P 2,160.00
Plus: Additional Mark-up 340.00
New Selling Price P 2,500.00

For business math, we shall refer mark-

on and additional mark-up as mark-up.

Learning Activity No.2

MARK-UP CANCELLATION AND MARKDOWN

Same problem will be used for the continuity of the discussion.
C. How much will be the reduced selling price if Ana will cancel
P 250.00 based on the new selling price?

Ana noticed that the new selling price of P 2,500.00 is too high and
customers will not purchase the product. She decided to lower the price to P
250.00.

This is what we call Mark-up cancellation. It refers to the decrease

in the new selling price that does not decrease below the original selling
price.

New selling Price P 2,500.00

Less: Mark-up cancellation 250.00
Reduced selling price P 2,250.00

➢ As you can see, the new selling price is reduced by P 250.00 which is
not lower than the original selling price of P 2,160.00.
➢ The reduced selling price is still higher than the original selling price.

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 D. What is the markdown if Ana reduced the original selling price to
P2,000.00?

If Ana reduces her original selling price from P 2,160.00 to P 2,000.00,

the P 160.00 reduced amount is called Mark down, which refers to
reduction in the original selling price.
Original Selling Price P 2,160.00
Less: Markdown 160.00
New reduced selling price P 2,000.00

➢ Based on the above problem, the new reduced selling price was
lower than the original selling price.

E. Markdown
For business math, mark-
up cancellation and Markdown
are referred to as Markdown only

E.Learning
MarkdownActivity No.3

Rico has a sari-sari store business. He bought

dozens of eggs worth P 7.50 per piece. If Rico wants
to sell the eggs per piece for P 9.00, how much is the
mark-on?
Rico later on decided to add P 0.50 from the original
selling price. Rico, in order to compete with other
competitors, reduced the original price to P 7.00.
How much is the mark-up?

MARK-UP

➢ Mark-up is the amount by which the cost of a product is

increased in order to derive the selling price.
➢ In order for you to get the total mark-up, you are first to get the mark-
on and the additional mark-up.

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 ➢ Given in the problem are the cost and the selling price, so you
need first
to find the mark-on. Hence,
Selling price= Cost + Mark-on

Selling Price P 9.00

Less: Cost 7.50
Mark-on P 1.50

Therefore: Mark-on P 1.50

Add: Additional Mark-up 0.50
Mark-up P 2.00

Take note:
Mark-on is the amount added to cost to get the original selling
price. Mark-up is any amount added to cost to get the selling price.
Unless specified in the problem, Mark-on and additional mark-up will be
called Mark-up only.

VI. Practice Exercise

Practice task 1

Analyze the given problem, write the answer in two decimal places.

1. The selling price of an item is P 1,100. Assume the mark-up is P300.00.

How much is the cost?

2.Maria sold her dress at P 550.00. She bought it for only P 480.00. How much
is the Mark-up?

3. Ronald bought 4 kls of mangoes for P400.00. Later he sold it to his friend
with a mark-up of P120.00. How much is the selling price?

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 Practice task 2
An item costs P 21,500.00. Assume an original selling price of P
22,500.00. The selling price was raised to P 23,000.00. It was later on
tagged to sell at P 22,000.00.
A. How much is the mark-on?
B. How much is the additional mark-up
C. How much is the markdown?

Practice task 3

Analyze the given problem then write the answer in two decimal places.

1. An item costs P500.00. Assume the original selling price of P650.00.

Later, P200.00 was added to the original selling price. It was later tagged
to sell at P630.00
A. How much is the mark-on?
B. How much is the new selling Price?
C. How much is the markdown?

2. An item has a mark-on of P200.00 and an original selling price of

P1,100.00. Later, the new selling price of the item was P1,500.00. Then,
it was tagged to sell at only P1,000.00.
A. How much is the cost?
B. How much is the additional- mark-up?
C. How much is the markdown?

3. An item has a cost of P175.00 and mark-on of P25.00. The new selling
price of the item was P275.00. Finally, the reduced selling price of the
item was P195.00.
A. How much is the original selling price?
B. How much is the additional mark-up?
C. How much is the markdown?

LET’S REMEMBER
The module contains one lesson and the following points must be
remembered:

✓ Cost refers to the purchase price of an article.

✓ Initial mark-up or mark-on refers to the amount added to the cost
to arrive at the original selling price.

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 ✓ Additional Mark-up refers to the amount added to the original
selling price to arrive at
✓ Mark-on and additional mark-up is referred to as Mark-up, unless
stated that the amount is added to cost to get the original selling
price, then that is mark-on.
✓ Mark-up cancellation refers to the decrease in the new selling
price that does not decrease it below the original selling price.
✓ Markdown refers to reduction in the original selling price.
✓ For business math, mark-up cancellation and markdown are
referred to as markdown only.
✓ Mark-up is the amount by which the cost of a product is increased
in order to derive the selling price.

VII. Post- Test

Solve the given problems and show your computations. Write the an-
swer in two decimal places.
A.
1. An item has a cost of P12,000.00. Assume an original selling price of P
12,500.00. It was later tagged to sell at P12,300.00
How much is the Mark- on?
How much is the markdown?

2. The original selling price of an item is P750.00. Its mark-on is P50.00

and Mark-down of P30.00.
How much is the Cost?
How much is the new selling price?

3. The cost of an item is P1,467.00. Its original selling price is P1,600.00.

Finally, it was tagged to sell for only P 1,500.00.
How much is the mark-on?
How much is the markdown?

4. The original selling price of an item is P420.00. Its mark-on is P80.00

and Mark-down of P20.00.
How much is the Cost?
How much is the new selling price?

5. The original selling price of an item is P650.00. Its mark-on is P50.00

and a Mark-down of P25.00.
How much is the Cost?
How much is the new selling price?

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 B. A sala set costs P 9,500.00. Assume that the original selling price was P
11,000.00. The selling price was raised to P 11,100.00. It was later on
tagged to sell at P 10,800.00
Find the following:
1. Mark-on
2. Additional Mark-up
3. Markdown

VIII. Assignment
Answer the following problems. Show your computation.
1. The cost of an item is P500.00. Its mark-up is P250.00.
A .How much is the selling price?
B. What is the MU rate based on Cost?
C. What is the MU rate based on selling price?
2. The cost of an item is P850.00. Its mark-up is P320.00.
A .How much is the selling price?
B. What is the MU rate based on Cost?
C. What is the MU rate based on selling price?
3. The cost of an item is P1,300.00. Its mark-up is P300.00.
A .How much is the selling price?
B. What is the MU rate based on Cost?
C. What is the MU rate based on selling price?
4.The cost of an item is P1,900.00. Its selling price is P2,220.00.
A. How much is the markup?
B. What is the MU rate based on Cost?
C. What is the MU rate based on selling price?
5. The selling price of an item is P6,500.00. Its markup rate based on selling
price is 30%
A. How much is the markup?
B. How much is the cost?
C. What is the markup rate based on cost?

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ANSWER KEY
PRE- TEST
1. Cost P 2,000.00
Mark-on 500.00
Original Selling Price 2,500.00
Add: Additional Markup 200.00
New Selling Price 2,700.00
Less: Markdown 300.00
Reduced Selling Price P 2,000.00

A. Initial Mark-up - P 500.00

B. Additional Mark-up - P 200.00
C. Mark-up - P 700.00
D. Markdown - P 300.00

2. Cost P 520.00
Mark-on 50.00
Original Selling Price 570.00
Add: Additional Markup 30.00
New Selling Price 600.00
Less: Markdown 50.00
Reduced Selling Price P 550.00

A. Cost - P 520.00
B. Initial mark-up - P 50.00
C. Additional mark-up - P 30.00
D. Mark-up - P 80.00
E. Markdown - P 50.00

3. Cost P 540.00
Mark-on 60.00
Original Selling Price 600.00
Add: Additional Markup 20.00
New Selling Price 620.00
Less: Markdown 40.00
Reduced Selling Price P 580.00

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PRACTICE TASK 1
1. Selling Price P1,100.00
Less: Mark-up P 300.00
Cost P 800.00
2. Selling Price P 550.00
Less: Cost P 480.00
Mark-up P 70.00

3. Cost P 400.00
Add: Mark-up P 120.00
Selling Price P 520.00

PRACTICE TASK 2

A. How much is the mark-on? - P 1,000.00

B. How much is the additional mark-up - P 500.00
C. How much is the markdown? - P 1,000.00

Cost P 21,500.00
Add: Mark-on 1,000.00
Original Selling Price 22,500.00
Add. Additional Markup 500.00
New Selling Price 23,000.00
Less: Markdown 1,000.00
Reduced Selling Price 22,000.00

PRACTICE TASK 3
1. A. Original Selling Price P 650.00
Less: Cost P 500.00
Mark-on P 50.00

B. Original Selling Price P 650.00

Plus: Additional Mark-up 200.00
New Selling Price P 850.00

C. New Selling Price P 850.00

Less: Reduced Selling Price 630.00
Markdown P 220.00

2. A. Original Selling Price P 1,100.00

Less: Mark-on 200.00
Cost P 900.00
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 B. New Selling Price P 1,500.00
Less: Original Selling Price 1,100.00
Additional Selling Price P 400.00

C. New Selling Price P 1, 500.00

Less: Reduced Selling price 1, 000.00
Markdown P 500.00

3. A. Cost P 175.00
Add: Mark-on 25.00
Original Selling Price P 200.00
B. New Selling Price P 275.00
Less: Original Selling Price 200.00
Additional Selling Price P 75.00

C. New Selling Price P 275.00

Less: Reduced Selling Price 195.00
Markdown P 80.0
POST-TEST
A. Complete the following table and show your computations.

No. Cost Original Reduced Mark-on Markdown

Selling Price Selling
Price

1. P 12,000.00 P 12,500.00 P 12,300.00 P 500.00 P 200.00

2. P 700.00 P 750.00 P 720.00 P 50.00 P 30.00

3. P 1,467.00 P 1,600.00 P 1,500.00 P 133.00 P 100.00

4. P 340.00 P 420.00 P 400.00 P 80.00 P 20.00

5. P 600.00 P650.00 P 625.00 P 50.00 P 25.00

B.
1. Mark-on - P 1,500.00
2. Additional Mark-up - P 100.00
3. Markdown - P 300.00
Cost P 9,500.00
Add: Mark-on 1,500.00
Original Selling Price 11,500.00

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 Add. Additional Markup 100.00
New Selling Price 11,100.00
Less: Markdown 300.00
Reduced Selling Price P10,800.00

Assignment
1. A. Cost P 500.00
Add: Markup 250.00
Selling Price P 750.00
B. MU rate based on cost = P250.00/ P500.00 = 50%
C. MU rate based on selling price = P 250.00/ P750.00 = 33.33%
2. A. Cost P 850.00
Add: Markup 320.00
Selling Price P 1,170.00
B. MU rate based on cost = P320.00/ P850.00 = 37.65%
C. MU rate based on selling price = P 320.00/ P1,170.00 = 27.35%

3. A. Cost P 1,300.00
Add: Markup 300.00
Selling Price P 1,600.00

B. MU rate based on cost = P300.00/ P1,300.00 = 23.08%

C. MU rate based on selling price = P 300.00/ P1,600.00 = 18.75%
4. A. Markup = Selling price - Cost
= P 2,220.00 - P 1,900.00
= P 320.00
B. MU rate based on cost = P320.00/ P1,900.00 = 16.84%
C. MU rate based on selling price = P 320.00/ P2,220.00= 14.41%
5. A. Markup = Selling Price x MU rate based on selling price
= P 6,500.00 x 30%
= P 1,950.00
B. Cost = Selling Price - Markup
= P 6,500.00 - P1,950.00 =P 4,550.00
C. MU rate based on cost = P1,950.00/ P4,550.00= 42.86%

REFERENCE

▪ Lopez-Mariano, N. D. Business Mathematics 1st edition, pp. 115-121

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