Unit 3: Buying and Selling

3.1. Mark-On, Mark-Down, Mark-Up and Margins

Questions to Ponder
1. What are the factors you consider when you buy or sell products?
Answers may vary. Like any other customer, you want to buy things at a lower price. If
you’re going to sell products, it is automatically understood that the price would be higher
because you need to consider the additional expenses when you buy the product. Another
thing is that when you sell, you want to make a profit.

2. How do you compute the selling price?

To compute the selling price, you need to add the mark-up to your cost. Your mark-up
value includes the expenses and your desired profit.

3. Why is it important to know how to compute the selling price?

Answers may vary. It is important to know how to compute the selling price so that you
can compare prices and choose the best price offered.

Check Your Progress

1. A concentrated mango syrup is sold with a mark-up of 45% of the selling price. Each
liter costs ₱18.00. Compute the (a) selling price per liter and the (b) rate of mark-up
based on cost. Round off your answers to two decimal places.
Answer: (a) ₱32.73 and (b). 81.83%

2. A movie ticket is priced at ₱220.00 each. Suppose you will buy the ticket at least 3
days before the screening day. It will be sold at ₱180.00 each. Compute for the
offered mark-down rate.
Answer: 18.18%

Try This
A. Short-Answer Response (Identification). Write the correct answer on the provided
space before each number.

selling price 1. What is being calculated when you get the sum of the cost,
expenses and profit?

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 Unit 3: Buying and Selling
mark-down 2. What is being calculated when you get the difference between
the original price and the new selling price?

mark-on 3. What is the product of the cost and the rate of mark-up?

margin 4. What is the product of the selling price and the rate of
mark-up?

mark-down 5. What is the product of the old selling price and the rate of
mark-down?

C. True or False. Write true if the statement is correct. Otherwise, write false.

False 1. Margin is the only type of mark-up.

True 2. To calculate the mark-on, you need to multiply the mark-up and
the cost.

True 3. To compute the margin, you need to multiply the rate of

mark-up and the selling price.

False 4. To compute the mark-down, you need to multiply the rate of

mark-down and the cost.

True 5. After subtracting the mark-down from the old selling price, you
will get the new selling price.

Practice Your Skills

Answer the following questions. Round off your answers to two decimal places..
1. What is the rate of mark-up based on the cost and selling price if a product has a
mark-up of ₱1,230.00 and a selling price of ₱6,540.00?
Answer: Rmo = 23.16% and Rmm = 18.81%

2. What is the rate of mark-up based on the cost and selling price if a product has a cost
of ₱6,650.00 and a selling price of ₱8,750.00?

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 Unit 3: Buying and Selling
Ànswer: Rmo = 31.58% and Rmm = 24%

3. What is the rate of mark-down and the new selling price if the original selling price is
₱900 and the mark-down value is ₱280.00?
Answer: Rmd = 31.11% and Sn = ₱620.00

4. Last year, Leni bought a residential lot for ₱350,000. She sells the property at its
present value, which is ₱500,000. How much is the mark-up? What is the mark-up
rate?
Answer: Mup = ₱150,000, Rmo = 42.86%

5. The price of an item originally sold at ₱375 was reduced to ₱200. How much is the
markdown? What is the markdown rate?
Answer: Md = ₱175, Rmd = 46.67%

Challenge Yourself
Solve for the following worded problems.
1. You bought bags at ₱200.00 each for your online store. Compute its (a) selling price
after implementing a margin rate of 80% and the (b) rate of mark-on.
Answer: a. ₱1,000.00 and b. 400%

2. A ride-all-you-can ticket at a theme park costs ₱980.00 each on weekends and has a
mark-down rate of 25% on weekdays. Compute your total savings if you will buy 3
tickets during weekdays.
Answer: ₱735.00

3. A gadget shop gives a mark-up rate of 20%. What is the selling price of a smartphone
that originally costs ₱16,999.00?
Answer: ₱20,398.80

3.1. Mark-On, Mark-Down, Mark-Up and Margins 3