Business Math

Markup and Markdown
Find the cost, markup or selling price when

any two of the three are known.
Find the percent of markup based on the

cost when the cost and selling price are
known.
Find the selling price when the cost and

percent of markup based on the cost are
known.
(continued)
Business Math, Eighth Edition

Cleaves/Hobbs
2009 Pearson Education, Inc. Upper Saddle River, NJ

07458 All Rights Reserved
Markup and Markdown

(continued)
Find the cost when the amount of markup

and the percent of markup based on the
cost are known.
Find the cost when the selling price and the

percent of markup based on the cost are
known.

Cleaves/Hobbs

Markup =
Selling price Cost
Cost
Selling price - Markup

Cleaves/Hobbs

Try these examples

If an item sells for $20 and has a markup of
$12, what is the cost of the item?
Answer: $8
If an item costs $16 and is sold for $20, what is
the markup of that item?
Answer: $4

Cleaves/Hobbs

Find the percent of markup based on the cost

when the cost and selling price are known
When the markup is based on cost

The rate of cost is always 100%

Cleaves/Hobbs

A retailer can buy a shirt from a wholesaler at

$10.00.
The retailer will add $5.00 to the cost.
The retailer then sells it for $15.00.

Cleaves/Hobbs

P=RxB
Using the formula
Markup = rate of markup x cost
Change the equation so the rate of markup
is equal to markup divided by the cost.

Cleaves/Hobbs

Rate of markup based on cost

The shirt

Cleaves/Hobbs
Cost
$10
Rate of
cost
100%
+Markup
$5
+ Rate of
markup
=Selling
price
$15
= Rate of
Selling
price

Five Step Solution Plan

1.
What you know

Rate of cost always equals 100%; MU and C values.
2.
What you are looking for?

Rate of markup and rate of selling price
3.
Solution plan
Rate of markup = MU divided by cost
4.
Solution
Carry out operation
5.
Conclusion
Add rate of MU to C to find rate of SP. Does it make sense?

Cleaves/Hobbs

Substitute the known values
A shirt that costs $10 and sells for $15 has a

markup rate of 50%
$5 divided by $10 is equal to .5 or 50%
Rate of markup [based on cost] is equal to
50%

Cleaves/Hobbs

Try these examples

1.
Dukes photography pays $9 for a 5x7

photograph. If the photograph is sold for $15,
what is the percent of markup based on cost?
Answer: 66.67%
2.
Lilly buys tea from England for $4 a box and

sells it in The Tea Party for $12 a box. Find
the percent of markup based on cost.
Answer: 200%
Cleaves/Hobbs

Find the selling price when the cost and percent of

markup based on the cost are known
A boutique pays $5 a pair for handmade

earrings and sells them at a 50% markup
based on cost. Find the selling price of
the earrings.
Cost
+Mark-up
=Selling price
Cleaves/Hobbs
$5
Rate of Cost
100%
? Rate of markup +50%

?
Rate of SP
=150%

Find the selling price
The rate of the selling price is found by

adding the rate of cost (100%) to the rate of
markup.
Selling price = Rate of selling price

(based on cost) x cost

Cleaves/Hobbs

Do these examples
What is the selling price for a CD which costs

the retailer $8.00 and is marked up 60% based
on cost?
Answer: $12.80
What is the selling price for a set of

hairbrushes which cost the salon $12.00 and is
marked up 150% based on cost?
Answer: $30

Cleaves/Hobbs

Find the cost when the amount and the

percent of markup are known
A DVD movie is marked up $6.50 which
represents a 40% markup based on cost.
What is the cost of the DVD?
Cost
RC
+MU 6.50 +RMU

= SP
Cleaves/Hobbs
100%
40%
= RSP 140%
Find the cost by dividing the markup

amount by the markup rate
Cost = Markup
Markup rate
Cost =
Cost = $16.25

Cleaves/Hobbs
$6.50
40% [or 0.4]

Try these two examples
Find the cost of a box of ballpoint pens which

has been marked up $4 and has a markup rate
of 30%.
Answer: $13.33
Find the cost of a pair of shoes that has been

marked up $25 and has a markup rate of 50%.
Answer: $50
Cleaves/Hobbs


percent of markup based on cost are known
A camera sells for $20. The markup rate
is 50% of the cost. Find the cost of the
camera and the markup.
Cost
RC
100%
+Markup
+RMU
50%
= Selling price
$20
= RSP
150%

Cleaves/Hobbs

Find the cost by dividing the selling price

by the rate of the selling price
Cost =
Selling price
Rate of the selling price
Cost =
$ 20
150% (or 1.5)
Cost = $13.33

Cleaves/Hobbs

Try these examples
Find the cost and markup of a bicycle

tire which sells for $18 and is marked up
50% of the cost.
Answer: $12 and $6
Find the cost and markup of a

moisturizing cream which sells for $30
and is marked up 150% of the cost.
Answer: $12 and $18

Cleaves/Hobbs

9.2 Markup based on selling

price and markup comparisons
Find the amount of markup and the percent

of markup based on selling price when the
cost and selling price are known.
Find the selling price when the amount of

markup and the percent of markup based on
selling price are known.
(continued)

Cleaves/Hobbs

9.2 Markup based on selling price

and markup comparisons
(continued)
Find the selling price when the cost and the

percent of markup based on the selling price
are known.

percent of markup based on the selling price
are known.
Compare the markup based on cost with the

markup based on selling price.

Cleaves/Hobbs

Take note!
In the previous section, the markup based

on cost, the rate of cost was always 100%.
In this section, the markup based on selling

price, the rate of selling price is always
100%.

Cleaves/Hobbs

Find the amount of markup

and the percent of markup
A calculator costs $5 and sells for $10. Find the
rate of markup based on the selling price.
Cost
$5
Rate of Cost
+Markup
+Rate of
Markup
= Rate of
Selling price
100%
= Selling price $10

Cleaves/Hobbs

Find the rate of markup by dividing the markup

by the selling price and multiplying it by 100%
The markup amount is the difference

between the selling price and the cost.
Divide the markup by the selling price to get

the difference and then multiply it by 100%,
to get the rate of markup.

Cleaves/Hobbs

Find the amount of markup and the percent of

markup (based on SP ) for the following items:
A dog collar which costs $4 and sells for $10.

Answer: $6 and 60%
A notebook which costs $1.25 and sells for $2.

Answer: $.75 and 37.5%

Cleaves/Hobbs

Find the selling price when the amount

of markup and the percent of markup
based on the selling price are known
Subtract the percent of markup from 100% to

obtain the rate of cost.
Divide the markup by the rate of markup based

on SP

Cleaves/Hobbs

Find the cost and selling price

if a handbag is marked up $5 with a
20% markup rate based on selling price

Cleaves/Hobbs
Cost
RC
+ MU
$5
+RMU
20%
= SP
= RSP 100 %

Find the selling price and

the amount of the markup
SP = Markup
Rate of Markup based on selling price
SP = $5
20% or [0.2]
SP = $ 25

Cleaves/Hobbs

Find the selling price and

amount of markup based on
selling price for the following items:
A cell phone which has been marked up $50

and with a markup rate of 33% based on selling
price.
Answer: $150
A pair of socks which has been marked up $3

and with a markup rate of 60% based on selling
price.
Answer: $5
Cleaves/Hobbs

Find the selling price when the

cost and the percent of markup
based on selling price are known
Subtract the rate of markup from 100% to

determine the rate of cost.
Selling price = Cost [divided by]

Rate of Cost based on SP

Cleaves/Hobbs

Find the selling price and markup for

a pair of jeans which costs the retailer $28
What is the selling price?
Cost
$28
RC
+ MU
+ RMU
30%
= SP
= RSP
100%

Cleaves/Hobbs

To find the selling price,

divide the cost by the rate of cost
SP = Cost
Rate of cost
SP = $28
70% [ = 0.7]
SP = $40

Cleaves/Hobbs

Find the selling price and markup (based

on selling price) for the following items:
A handheld calculator that costs the retailer $2
and is marked up 60%.
Answer: $5 and $3
A box of gourmet chocolates that costs $8 a box
and is marked up 75%.
Answer: $32 and $24
Cleaves/Hobbs

Find the cost when the selling

price and percent of markup
based on selling price are known
Subtract the rate of markup from the rate of

selling price to determine the rate of cost.
Cost = Rate of Cost x Selling Price

Cleaves/Hobbs

Find the markup and cost of a box of pencils that sells

for $2.99 and marked up 25% of the selling price
First, find the rate of cost.

Cost
RC
+ MU
+RMU
25%
= SP
$2.99
= RSP
100%

Cleaves/Hobbs

Compare the markup based on cost

with markup based on selling price
Find the markup based on cost and the
markup based on selling of a computer that
costs $1,500 and sells for $2,000.
Cost 1500
RC
100%
+MU
+R
MU
500
= SP 2000 =RSP

Cleaves/Hobbs
Cost 1500
RC
+MU
500
+R
MU
=SP
2000 =RSP 100%

What is the difference?
The percentage of markup based on cost is

33.33%.
The percentage of markup based on selling

price is 25%.
What accounts for the difference?

Cleaves/Hobbs

Converting a markup based on

selling price to a markup based on
cost
The markup rate based on cost is
equal to the markup rate based on
selling price divided by 100% minus
the markup rate based on selling
price.

Cleaves/Hobbs

Converting a markup
based on cost, to a markup
based on selling price
The markup rate based on selling
price is equal to the markup rate
based on cost divided by the markup
rate based on cost plus 100%.

Cleaves/Hobbs

9.3 Markdown, Series of

Markdowns and Perishables
Find the amount of markdown, the reduced

(new) price, and the percent of the markdown.
Find the final selling price for a series of

markup and markdowns.
Find the selling price for a desired profit on

perishable and seasonal goods.

Cleaves/Hobbs

Find the amount of markdown,

the reduced (new) price and
the percent of the markdown
The original selling price

is always 100%

Cleaves/Hobbs

Find the markdown and

rate of markdown
The markdown is found by subtracting the new

price from the original price.
The markdown rate is found by dividing the

markdown by the original price and multiplying
that figure by 100%.

Cleaves/Hobbs

A lamp originally sold for $36 and is

marked down to sell for $30. Find the
markdown and rate of markdown.
Original Selling
Price (S)
$36
100%
-Markdown
= New Price
$6
$30
?
?

Cleaves/Hobbs

Find the final selling price for a series

of markup and markdowns
Each new price becomes the base.
For markups based on cost, multiply the base

by 1 + the rate of markup.
For markdowns, multiply the base by the

complement of the rate of markdown.

Cleaves/Hobbs

Find the final selling price

Find the final price for an item that cost
$18, marked up by 20% and then, was
marked down 33%, and subsequently
marked up 10% and finally marked down
by 50% for clearance.
Answer: $7.91

Cleaves/Hobbs

Find the selling price for a desired

profit on perishable and seasonal goods
Determine the cost by multiplying the unit price

by the quantity.
Determine the markup rate and amount and add

to the cost.
Establish the expected to sell amount.
Divide the total selling price by the expected to

sell amount.
Cleaves/Hobbs

Find the per pound selling price
Mr. Green buys 100 pounds of tomatoes at $.15

lb. and establishes a markup rate of 120%
based on cost. What is the total cost?
TC = $15 + MU=$18 =Total SP =$33
He expects to sell 90%. How many pounds is
he expected to sell?
Expected to sell = 90
Divide the TSP by expected to sell number.
SP = $0.37 lb. (rounded)
Cleaves/Hobbs


Business Math

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Markup and Markdown

Find the cost, markup or selling price when

Find the percent of markup based on the

Find the selling price when the cost and

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Markup and Markdown

Find the cost when the amount of markup

Find the cost when the selling price and the

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Selling price Cost

Selling price - Markup

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Try these examples

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Find the percent of markup based on the cost

When the markup is based on cost

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

A retailer can buy a shirt from a wholesaler at

The retailer then sells it for $15.00.

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Rate of markup based on cost

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Five Step Solution Plan

What you know

What you are looking for?

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Substitute the known values

A shirt that costs $10 and sells for $15 has a

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Try these examples

Dukes photography pays $9 for a 5x7

Lilly buys tea from England for $4 a box and

2009 Pearson Education, Inc. Upper Saddle River, NJ

Find the selling price when the cost and percent of

A boutique pays $5 a pair for handmade

? Rate of markup +50%

2009 Pearson Education, Inc. Upper Saddle River, NJ

Find the selling price

The rate of the selling price is found by

Selling price = Rate of selling price

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

What is the selling price for a CD which costs

What is the selling price for a set of

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Find the cost when the amount and the

+MU 6.50 +RMU

Find the cost by dividing the markup

Business Math, Eighth Edition

2009 Pearson Education, Inc. Upper Saddle River, NJ

Try these two examples