Buying and Selling

Mark-on
refers to what percentage must be added to the production cost of
commodity in order to attain the selling price and create profit. Sometimes
stated as the difference between the selling price and the cost of producing
the product. Generally it is called margin or profit, since it is an amount
beyond what is needed. Knowing the production cost of goods makes it
easier to know the margin.
 
Mark-down
is a practice of lowering a regular price or original selling price of a
certain product or goods. The practice aims of attracting more costumer and
more sales, to be within the competitor's price, to reduce large inventories,
to clear old and slow moving stocks. Mark-down is also the difference
between the regular selling price and the new price to be used.
Mark-up
is the amount by which the regular or original selling price is further
increased. It means that from the original selling price, a retailer may raise
the regular selling price of his inventories due to an increased of price in the
market or if the supply is insufficient. As previously explained, the regular or
the original selling price already contains the percentage or margin based on
the production cost. But to keep up with the market price, additional margin
is likely needed.
Mark-on, mark-up and mark-down can be computed by considering the following formula:

1. Mark-on
SP = CP + MO
Selling price = Cost of production + Mark-on
2. Mark-on rate or percent
a. Based on cost of production
MORC = X 100%
b. Based on selling price
MORS = X 100%

3. Mark-down
Md = OSP – RSP
Mark-down = Original selling price – reduce sales price
4. Mark-down rate of percent
MDR = X 100%

5. Mark-up
MU = ISP – PSP
Mark-up = Increased sales price – previous sales price

6. Mark-up rate or percent

MUR = X 100%
 Mark Brothers are planning to enter the world of online selling, which
includes the idea of mark-on, mark-up and mark-down, to help them let us
answer the following:
1. If they’re going to sell Dedication Cake
Mark Brother’s Selling Price . . . . . . . . . Php 505
Supplier price. . . . . . . . . . . . . . . . . . . . . Php 355
Mark-on/profit . . . . . . . . . . . . . . . . . . . ________
1. If they’re going to sell Dedication Cake
Mark Brother’s Selling Price . . . . . . . . . Php 505
Supplier price. . . . . . . . . . . . . . . . . . . . . Php 355
Mark-on/profit . . . . . . . . . . . . . . . . . . . Php 150
a. Based on cost of production
MORC = X 100% MORC = 0.4225 X 100%
 
MORC = X 100% MORC = 42.25%
 
b. Based on selling price
MORS = X 100% MORS = 0.2970 X 100%
 
MORS = X 100% MORS = 29.70%
2. If they’re going to sell pack of marinated Jollibee chicken joy in a lower
price.
Regular price . . . . . . . . . . . . . . . . . . . . Php 450
New price. . . . . . . . . . . . . . . . . . . . . . . Php 385
Mark-down. . . . . . . . . . . . . . . . . . . . . . ________
2. If they’re going to sell pack of marinated Jollibee chicken joy in a lower price.
Regular price . . . . . . . . . . . . . . . . . . . . Php 450
New price. . . . . . . . . . . . . . . . . . . . . . . Php 385
Mark-down. . . . . . . . . . . . . . . . . . . . . . Php 65
MDR = X 100% MDR = 0.1444X 100%
 
MDR = X 100% MDR = 14.44%
3. If they’re going to sell Bicycle during ECQ
Increased price . . . . . . . . . . . . . . . . . . Php 3500
Price before the increased . . . . . . . . Php 2800
Mark-up. . . . . . . . . . . . . . . . . . . . . . . . . ________
3. If they’re going to sell Bicycle during ECQ
Increased price . . . . . . . . . . . . . . . . . .Php 3500
Price before the increased . . . . . . . .Php 2800
Mark-up. . . . . . . . . . . . . . . . . . . . . . . . .Php 700
MUR = X 100% MUR = 0.25X 100%
 
MUR = X 100% MUR = 25%