Republic of the Philippines

Department of Education
National Capital Region
DIVISION OF CITY SCHOOLS – MANILA
Manila Education Center Arroceros Forest Park
Antonio J. Villegas St. Ermita, Manila

Business Mathematics
Key Concepts in
Buying and Selling

https://images.app.goo.gl/bG24qGKawpzeHpKw9

Quarter 1 Week 5 Module 5

Learning Competency:
Differentiate Mark-on, Mark down, and
Mark-up
Obtain Mark-on, Mark-down, and Mark
up given price of a product

ABM_BM11BS-lg-1
 Learning Module for Business Mathematics

HOW TO USE THIS MODULE?

Before starting the module, I want you to set aside other task/s that will
disturb you while enjoying the lessons. Read the simple instructions
below to successfully enjoy the objectives of this kit. Have fun!

1. Follow carefully all the contents and instructions indicated in

every page of this module.
2. Write on your notebook the concepts about the lessons.
Writing enhances learning, that is important to develop and
keep in mind.
3. Perform all the provided activities in the module.
4. Let your facilitator/guardian assess your answers using the
answer key card.
5. Analyze conceptually the posttest and apply what you have
learned.
6. Enjoy studying!

PARTS OF THE MODULE

• Expectations - These are what you will be able to know

after completing the lessons in the module.
• Pre-test - This will measure your prior knowledge and the concepts
to be mastered throughout the lesson.
• Looking Back to your Lesson - This section will measure what
learnings and skills did you understand from the previous lesson.
• Brief Introduction- This section will give you an overview of the
lesson.
• Activities - This is a set of activities you will perform with a partner.
• Remember - This section summarizes the concepts and
applications of the lessons.
• Check your Understanding - It will verify how you learned from the
lesson.
• Post-test - This will measure how much you have learned from
the entire module

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 Learning Module for Business Mathematics

LESSON
5 Buying and Selling
EXPECTATIONS

As we study and immerse ourselves in “Business Mathematics” in the

process, it is necessary to know some Concepts, Principles and Formulas.
The module is subjected to discuss Module 5 – Buying and Selling.

Specifically, this module will help you to:

a. Differentiate Mark-on, Mark down and Mark-up; and
b. Obtain Mark-on, Mark-down, and Mark up given price of a
product.

Let us start your journey in

learning more on buying and
PRETEST selling. I am sure you are ready
and excited to answer the Pretest.
Smile and Enjoy!
MULTIPLE CHOICE.
Directions: Solve the following problems. Choose the letter of the correct answer.
1. If the cost of a cellphone case is P80 and the markup rate on cost is 60%,
the markup amount is
A. P48 C. P54
B. P32 D. P26
2. If the cost of a cookie is P5 and the selling price is P12, the markup rate on
the cost is
A. 41.7% C. 40%
B. 58.3% D. 140%
3. If the markup rate on the cost of a calculator is 48% and the markup is
P115.20, the cost is
A. P55.30 C. P211.54
B. P240.00 D. P105.60
4. A fancy watch sells for P180. If there is a 45% markup on the selling price,
the markup amount is
A. P99.00 C. P327.27
B. P400.00 D. P81.00

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 Learning Module for Business Mathematics

5. If there is a 40% markup on the selling price and the markup is P320,
the selling price is
A. P533.33 C. P128.00
B. P800.00 D. P192.00
Bluman, Allan G., 2006 Business Math Demystified A Self Teaching Guide. p. 164;. United States of America. McGraw-
Hill Companies, Inc

Great, you finished answering the

questions. You may request your
facilitator to check your work.
Congratulations and keep on learning!

LOOKING BACK TO YOUR LESSON

Two quantities are said to be directly

proportional if as the value of one quantity
increases (or decreases), the value of the
other also increases (or decreases) in such
a way that the ratio of the value of the two
quantities remains the same.

Two quantities may change in such a

manner that if one quantity increases, the
other quantity decreases and vice-versa
and that is what we called indirect or
inverse proportion while partitive
proportion involves identifying parts of a
whole based on given ratios of these parts.
https://images.app.goo.gl/1Xi7RViffsdVi15E8

Let’s do this!
Give 3 kinds of proportion.

1. _______________________________________

2. _______________________________________

3. _______________________________________

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 Learning Module for Business Mathematics

BRIEF INTRODUCTION

Operating Cost. The price

Cost Price. The price that a
(per unit) incurred relative to
merchant pays for an item.
the production and sale of a
(Bluman, A., 2006)
commodity. (Licuanan, P.,
Mark-down. The selling price of
2016)
an item is reduced. (Bluman, A.,
Selling Price. The price at
2006)
which the commodity is sold
Mark-on. Businesses want to
per unit. (Licuanan, P., 2016)
take advantage of peak season
Profit. Money earned after the
and thus, increase the prices
cost price and the operating
already pegged for their
costs are accounted for after
commodities. (Licuanan, P., 2016)
the sale of a commodity.
Markup. The difference between
(Licuanan, P., 2016)
the cost of the item and its selling price.
(Bluman A., 2006)

https://images.app.goo.gl/tMFZcjFNPXfNg8uv5

Markup Rate

A markup must be stated in one of two ways: (1) a percent of cost, or as

(2) a percent of selling price.

Markup rate based on cost is the ratio of markup to its cost expressed
in percent. On the other hand, markup rate based on selling price is the
ratio of the markup to its selling price expressed in percent.

The method used is usually determined by

the way in which a business keeps its records.
Since most manufacturers keep their records in
terms of cost, they usually calculate markup as a
percent of cost. And most department stores and
other retailers keep their records in terms of
selling price. They usually calculate markup as a
https://images.app.goo.gl/Qhh4ZP81VDm
percent of selling price. (Chua, S., 2018) 58o 1

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 Learning Module for Business Mathematics

For a person in a business that sells merchandise to make a profit, he or

she must sell the merchandise at a price higher than what he or she paid for it.
The basic formulas for markup are
Selling price (S) = Cost (C) + Markup (M) or S = C + M
Markup (M) = Selling price (S) − Cost (C) or M = S − C
Cost (C) = Selling price (S) − Markup (M) or C = S − M

Markup on Cost
When the markup is a percent of the cost, the cost becomes the base or
the 100%. Suppose an item had a 25% markup on cost; then the formula
would be:
Selling price = Cost + Markup
125% = 100% + 25%
In other words, the selling price is 125% of the cost.
The markup is the part, the markup percent is the rate, and the cost is
the base. Three additional formulas are used in markup on cost problems.
They can be explained by using the circle.

Remember to change the percent to a

decimal or fraction before multiplying or
dividing.

EXAMPLE: Find the markup and

selling price that costs P24 if there is a
35% markup on cost.
SOLUTION:
Find the markup.
Markup = Rate × Cost or M = R × C
= 0.35 × P24
= P8.40
Find the selling price.
Selling price = Cost + Markup
or S = C + M
= P24 + P8.40
= P32.40
Bluman, Allan G., 2006 Business Math Demystified A
Self-Teaching Guide. p. 92;. United States of America.
McGraw-Hill Companies, Inc. Hence the markup is P8.40 and the selling
price is P32.40.

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 Learning Module for Business Mathematics

Tip!
The selling price could also be found by multiplying the cost by 135%
100%- original price + 35%-value of mark up, i.e., 1.35 × P24 = P32.40.

EXAMPLE: If the markup on a marker is P18 and the markup rate is 30% on
cost, find the cost and the selling price of the marker.
SOLUTION:
Find the cost.
Cost = Markup
Rate
or C = M
R
= P18
30%
= P60

= P60 + P18
= P78
Hence the cost is P60 and the selling price is P78.

Markup on Selling Price

Sometimes the markup is based on the selling price. This is often more
convenient than determining the markup on cost since the cash register
records the transactions based on the selling price. Also, discounts and sales
commissions are based on the selling price of the item. When the markup is
based on the selling price, the selling price becomes the base or 100%; for
example, if there is a 25% markup on the selling price, the formula looks like
this: (Bluman, A., 2006)
Selling price = Cost + Markup
100% = 75% + 25%

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 Learning Module for Business Mathematics
EXAMPLE: A sandals sells for P150. If
there is a 30% markup on the selling
price, find the cost and the amount of
markup.

SOLUTION:

Find the amount of the markup.

Markup = Rate × Selling Price
or M = R × S
= 0.30 × P150
= P45

Find the cost.

Cost = Selling Price – Markup
= P150 – P45
= P105
Hence the markup amount is P45 and
the cost is P105.

Bluman, Allan G., 2006 Business Math Demystified A

Self-Teaching Guide. p. 98;. United States of America.
McGraw-Hill Companies, Inc

EXAMPLE: If the markup on a ballpen is P6 and the markup rate is 30% of

the selling price, find the selling price and the cost of the scrapbook.
SOLUTION:
Find the selling price.
Selling price = Markup
Rate
or S =M
R
= P6
0.30
= P20
Find the cost.
Cost = Selling price − Markup or C = S − M
= P20 − P6
= P14
Hence the cost is P14 and the selling price is P20.

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 Learning Module for Business Mathematics

Relationships Between the Markups

If you know the markup rate on the cost, you can find the corresponding
markup on the selling price and vice versa. The markup rate on the selling
price will always be less than the markup rate on the cost. If you are given the
markup rate on the cost and want to find the markup rate on the selling price,
follow these steps:
Step 1. Convert the rate to a decimal.
Step 2. Substitute in the formula:
Markup rate on selling price = Markup rate on cost
1 + Markup rate on cost
Step 3. Convert the answer to a percent (i.e., multiply by 100).
EXAMPLE: If the selling price of an item is P120 and the markup rate on cost
is 40%, find the markup amount.
SOLUTION:
Since you are given the selling price, it is necessary to convert the
markup rate on the cost to the markup rate on the selling price and then find
the markup rate.
Markup rate on selling price = Markup rate on cost
1 + Markup rate on cost
= 0.40
1 + 0.40
= 0.40
1.40
= 0.286 (rounded) = 28.6%
M =R×S
= 0.286 × P120
= P34.32
Hence the markup amount is P34.32.

If you are given the markup rate on the selling price, you can find the
equivalent markup rate on the cost by following these steps:
Step 1. Convert the rate to a decimal.
Step 2. Substitute in the formula:
Markup on cost = Markup rate on selling price
1 − Markup rate on selling price
Step 3. Convert the answer to a percent.

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 Learning Module for Business Mathematics

EXAMPLE: If the markup rate on the selling price is 20%, find the
equivalent markup rate on the cost.
SOLUTION:
Markup on cost = Markup rate on selling price 1
− Markup rate on selling price
= 0.20
1 − 0.20
= 0.20
0.80
= 0.25 = 25%
Hence a markup of 20% on the selling price is equivalent to a 25%
markup rate on the cost. This can be verified by considering an item that sells
for P80. A markup of 20% on the selling price is 20% × P80 = 0.20 × P80= P16
Now the cost of the item is P80−P16 = P64. A 25% markup on cost is
25% × P64 = 0.25 × P64= P16
Notice that the markup amount of P16 is the same in both cases.
Knowing how to convert from one markup to the other is helpful when solving a
problem when you are given the selling price and the markup rate on the cost
or when you are given the cost and the markup rate on the selling price. All
you need to do to solve these types of problems is convert the markup rate to
the other base and solve as shown in the two previous sections.
Bluman, Allan G., 2006 Business Math Demystified A Self Teaching Guide. pp. 103-105;. United States of America.
McGraw-Hill Companies, Inc

MARK-ON

Because of Covid-19, online

business becomes “in” now-a-days
because of the restrictions set by the
government to protect us. Many people
sell their products online and most of
the people enjoyed this kind of
platform. Buyers can easily afford the
selling price the sellers have pegged
while waiting comfortably at their
respective homes.
https://images.app.goo.gl/a4QrzEmDQBKRZ1eRA
Some businesses will want to take advantage of this peak season and
thus, increase the prices already pegged for their commodities. This is what we
call the MARK-ON.

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 Learning Module for Business Mathematics

Formula:
MARK-ON (MO) = PEAK SELLING PRICE (PS) – REGULAR SELLING PRICE (S)
MO=PS–S
When does Mark-on usually happens?
• a calamity has hit the source of a raw material or commodity therefore
affecting its supply
• seasonal demands (Christmas items, Valentines, etc.)
• special occasion is being celebrated (commemorative, death
anniversary, etc.)
Licuanan, Patricia B., et.al, 2016 Teaching Guide for Senior High School Business Mathematics. P.75. Quezon City,
Philippines. CHED

TRIVIA!

The Department of Trade and Industry protects the consumers during

calamities, seasonal demands, special occasion, and alike, thru having a price
watch and implementing Suggested Retail Price (SRP) to all commodities. Also,
the Philippine government adopted RA 7394 (Consumer Act of the Philippines of
1991) as the legal basis for consumer protection in the country.
https://images.app.goo.gl/p1wb5jfghLHnKeVy5

EXAMPLE:
1. Seller A observes that market goers prefer to buy fish from him because of
African Swine Flu to meat in the market this season. He then decides to
increase the price of tilapia by PHP5 per kilo. If the cost of tilapia is PHP110
per kilo with a 25% mark-up, what is its new selling price with the additional
increase of PHP5? By how much is the rate of mark-up based on cost increased
by adding PHP5 to the regular selling price of the tilapia?

SOLUTION: 25% is converted into decimal, 25÷100

Mark Up = 0.25 x Original Price
= 0.25 x 110 Price of the product
= Php 27.50
Selling Price before increase:
Selling Price = Cost + Mark Up
= 110 + 27.50
= PhP137.50

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 Learning Module for Business Mathematics
Selling Price after increase:
= Selling Price + Mark-On
= 137.50 + 5
= PhP142.50 27.50+5
110
Combined Rate of Mark-up and Mark-on = = 0.2954 = 29.54%
29.54 – 25 = 4.54%
The mark-up is increased by 4.54% by the additional mark-on of PhP5 imposed
by Seller A.

MARKDOWN

Most retail businesses at one time or another

have sales. Here the sale price of the merchandise is
reduced to get rid of it. There are many reasons for
reducing the price. For example, summer clothes are
reduced in the fall.
https://images.app.goo.gl/W48o8og8mdidwZYa9

After Christmas, decorations are reduced so that the store will not have to
store them. When the selling price of an item is reduced, it is called a markdown.
All markdowns are calculated using the selling price as the base. The markdown
amount is subtracted from the selling price to find the reduced price.

EXAMPLE: A weed trimmer was purchased for P40 and was marked up 60% on
cost. For a July 4 sale, it was marked down 25%. After the sale, it was marked up
30%. On September 1, it was marked down 20%. Find the final selling price.
SOLUTION:
Find the first markup.
Markup = Rate × Cost
= 0.60 × P40
= P24
S =C+M
= P40 + P24
= P64

= 0.25 × P64
= P16
Reduced price = P64 − P16
= P48

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 Learning Module for Business Mathematics
Find the second markup.
Markup = Rate × Reduced price
= 0.30 × P48
= P14.40

= P48 + P14.40
= P62.40

= 0.20 × P62.40
= P12.48

= P62.40 − P12.48
= P49.92
The final selling price is P49.92.
Sometimes items are marked down for a sale and then the unsold items
are marked up after the sale. This could occur several times during the year.
This is known as a series of markups and markdowns. The first markups could
be based on the cost or the selling price of the item. The remaining markdowns
and markups use the previous selling price as the base.
Bluman, Allan G., 2006 Business Math Demystified A Self Teaching Guide. pp. 106-107;. United States of America.
McGraw-Hill Companies, Inc

ACTIVITIES

Directions: Solve the following problems. Write your answer in the yellow pad.
1. A fancy bracelet sells for P120 and has a markup of P40. The markup
rate on the selling price is
A. 25% C. 33.3%
B. 66.7% D. 50%
2. If a chocolate sell for P50 and the markup is P30, the markup rate on the
cost is
A. 60% C.150%
B. 40% D. 66.7%
3. A lighter sell for P60. It is marked down 30%. The reduced price is
A. P78 C. P18
B. P42 D. P45

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 Learning Module for Business Mathematics

4. A school service costs P20/day. It is marked up 80% on the cost. Around

summer time, it is reduced 40%. During rainy season, it is marked up 50%.
The final service price is
A. P32.40 C. P21.60
B. P36.00 D. P38.00
5. A fish balls factory makes 600 packs of fish balls a day. They sell
P0.50/pc fish balls. About 12% are not sold each day and are discarded. The
adjusted sale price is
A. P0.60 C. P0.57
B. P0.62 D. P0.54
Bluman, Allan G., 2006 Business Math Demystified A Self Teaching Guide. p. 164;. United States of America. McGraw-
Hill Companies, Inc

REMEMBER
In business, to make a profit, it is necessary to sell items for more
than business owners paid for them. The difference between the cost of an item
and the selling price is called the markup. The markup can be a percentage of
the cost or a percentage of the selling price.
Sometimes it is necessary to reduce the selling price of an item. In this case, it
is called a markdown. Many times, items are marked up and then marked
down, and so on. This is a series of markups and
markdowns. (Bluman, A., 2006)
In Buying and Selling, buyers and sellers must be
both winners after the transaction. Buyers having quality
product and the seller having profit.
https://images.app.goo.gl/FsMzdRpc8NxaGi6S8

CHECK YOUR UNDERSTANDING

Directions: Solve the problem given below.
1. Find the markup rate on the selling price of an item that is equivalent to a
10% markup on cost.
2. Find the markup rate on the cost of an item that is equivalent to a 33%
markup on the selling price.
3. Find the markup on the cost of an item that is equivalent to a 45% markup
on the selling price.
4. If a pair of men’s socks sells for P60 and there is a 30% markup on the
selling price, find the amount of the markup and the cost.
5. If a baking pan sells for P650 and there is a 45% markup on the selling
price, find the amount of the markup and the cost.

14
 Learning Module for Business Mathematics

6. A cutter set has a markup of P40. The markup on the selling price is 20%.
Find the cost and the selling price of the drill set.
7. If a rim of bond paper costs P180 and sells for P250, find the markup rate
based on cost.
8. An analog cellular phone sells for P700 and the markup is P250. Find the
markup rate on cost.
9. If the markup on a set of kids’ two-way radios is P32 and the markup rate
on cost is 48%, find the cost and selling price of the radios.
10. If a notebook binder has a markup of P300 and the markup rate is
60% on cost, find the cost and selling price of the computer.

Bluman, Allan G., 2006 Business Math Demystified A Self Teaching Guide. pp. 94,100, and 110;. United States of
America. McGraw-Hill Companies, Inc

POSTTEST

Directions: Solve the given problem below.

1. Aling Ana would like to sell little trinkets she purchased from Divisoria for
PhP12 each. If the operating cost is set at 25% of the cost and she would like to
have a 15% profit on the cost of each item,
a. Determine the mark-up price for each trinket.
b. Help Aling Ana determine the selling price for each trinket.
2. A jacket which costs PhP1,350 is being sold at PhP2,025. What is the rate of
mark-up based on cost?
3. Julia buys a notebook with a cost of PhP45. The rate of mark-up based on
cost is 25%. Find the selling price and the mark-up.
4. Peter decides to impose a mark-up of PhP5 on each pen he sells to his
classmates and friends. This represents a 20% mark-up based on the selling
price. Find the cost and the selling price of the pens Peter sells.
5. A top costs Mang Mario PhP280 and he decides to mark it up by 30% of the
selling price. Find the selling price and mark-up for the said top.
Licuanan, Patricia B., et.al, 2016 Teaching Guide for Senior High School Business Mathematics. P.71-73. Quezon City,
Philippines. CHED

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 Learning Module for Business Mathematics

REFLECTIVE LEARNING SHEET

When the quarantine started in

the Philippines, many of the essential
goods started to have price hike as the
DTI gives restrictions to some of the
essential goods to be bought by bulk,
despite the fact that others begin to
panic buying and stores begin to
observe guidelines of IATF that makes it
harder for the buyers to buy essential
goods conveniently.

Now, DTI lifted purchase limits for

https://images.app.goo.gl/p1wb5jfghLHnKeVy5
essential items. Will this action of DTI
affect the prices of our commodities?
Share your thoughts about this, citing
what have you learned in mark-up,
mark-on and mark-down.

____________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
.

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 Learning Module for Business Mathematics

E-SITES

To further explore the concept learned today and if it possible to connect

the internet, you may visit the link:

https://www.slideshare.net/nazrin91/chapter-6-31397772

REFERENCES

Bluman, Allan G., (2006) Business Math Demystified A Self Teaching Guide. pp.
91-115;. United States of America. McGraw-Hill Companies, Inc

Chua, Simon L., et.al, (2018) Soaring 21st Century Mathematics Grade 11
Business Mathematics. pp. 148-151. Quezon City, Philippines.
Phoenix Publishing House.
Licuanan, Patricia B., et.al, (2016) Teaching Guide for Senior High School
Business Mathematics.pp.66-82. Quezon City, Philippines. CHED.

Module Images:
https://images.app.goo.gl/p1wb5jfghLHnKeVy5. Retrieved June 29, 2020
https://images.app.goo.gl/FsMzdRpc8NxaGi6S8. Retrieved June 29, 2020
https://images.app.goo.gl/tMFZcjFNPXfNg8uv5. Retrieved June 29, 2020
https://images.app.goo.gl/1Xi7RViffsdVi15E8. Retrieved June 29, 2020
https://images.app.goo.gl/Qhh4ZP81VDm58oRh9. Retrieved June 30, 2020
https://images.app.goo.gl/a4QrzEmDQBKRZ1eRA. Retrieved June 30, 2020
https://images.app.goo.gl/W48o8og8mdidwZYa9. Retrieved June 30, 2020

17
 Learning Module for Business Mathematics

Acknowledgements

Writers: Clarabelle V. Dalimit, DEM

Jupiter Q. Whiteside, MBA

Editor: Isabel A. Gumaru, DBA

Evaluator: Ellaine I. Dela Cruz, DBA

Validator & Reviewer:

Remylinda T. Soriano, EPS, Math
Angelita Z. Modesto, PSDS
George B. Borromeo, PSDS

Management Team:
Maria Magdalena M. Lim-Schools Division
Superintendent-Manila
Aida H. Rondilla-Chief Education Supervisor
Lucky S. Carpio-EPS
Lady Hannah C Gillo, Librarian II-LRMS

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 Learning Module for Business Mathematics

ANSWER KEY

PRE TEST LOOKING BACK TO YOUR

1. A LESSON
2. D (IN ANY ORDER)
3. B 1. Direct Proportion
4. D 2. Indirect or Inverse Proportion
5. B 3. Partitive Proportion
ACTIVITIES
1. C
2. C
3. B
4. A
5. C
CHECK YOUR UNDERSTANDING
1. 0.091 (rounded) = 9.1% 7. M=P70
2. 0.493 (rounded) = 49.3% R = 0.389 (rounded) = 38.9%
3. 0.818 (rounded) = 81.8% 8. C = P450
4. M=P18 R = 0.643 (rounded) = 64.3%
C=P42 9. C = P66.67
5. M =P292.50 S = P98.67
C =P357.502 10. C = P500
6. S = P200 S = P800
C = P160
POST TEST 4. S = PhP 25
1.a. MU = Php 4.80 C =PhP20
b. S = Php 16.80 5.C = PhP400
2. MUC% = 50%
MU =PHP120
3.MU = PhP11.25
S = PhP56.25

19