Business Mathematics

Mark Up & Margin

 01 Mark Up
also referred to as margin or gross
profit, is the increase in price or the
additional amount in price to cover its
business and provide profit

02 Cost
Mark Up is the price that a company or store
must pay for the goods before any
profit is added.

03 Selling Price
is the price in which the product is
sold.
 TERMS
M Mark Up

U MU% Mark Up Rate

SP Selling Price

MA% Margin Rate

C Cost
FORMULA

MU = SP - C
SP = C + MU
C = SP - MU
MU = SP - C
1. Carmen does buy and sell; she bought a perfume for
SP = C + MU
PHP450, and she sold it for PHP600. What is the mark up?
C = SP - MU
C = 450
SP = 600
MU = ?

MU = SP – C
MU = 600 – 450
MU= 150
MU = SP - C

SP = C + MU 2. A live seller bought a shirt at PHP150 and decides to

impose a mark up of PHP50. What is the sale price?
C = SP - MU
C = 150
SP = ?
MU = 50

SP = C + MU
SP = 150 + 50
SP = 200
MU = SP - C

SP = C + MU 3. Find the cost of an electric fan being sold for PHP1,305

with a PHP205 mark up.
C = SP - MU

C=?
SP = 1,305
MU = 205

C = SP – MU
C = 1,305 – 205
C = 1,100
 
Mark up is usually expressed as a percent; it can be expressed as;

Mark up based on COST or MARK UP RATE:

MU% = MU x100
C
Mark up based on SELLING PRICE or
MARGIN RATE:
MA% = MU x100
SP
Mark up is usually expressed as a percent; it can be expressed as;

Mark up based on COST or

MARK UP RATE: MU
MU% = MU x100
C
Mark up based on SELLING MU% C
PRICE or MARGIN RATE:
MA% = MU x100
MA% SP
SP
MU = SP - C 1. Julia buys a notebook with a cost of PHP45. The rate of
SP = C + MU
mark up based on cost is 25%. Find the selling price and the
mark up.
C = SP - MU
SP = ? SP = C + MU
MU = ? SP = 45 + 11.25
MU
C = 45 SP = 56.25
MU% C MU% = 25%
MA% SP

MU = MU% C
MU = 25% 45
MU = 11.25
MU = SP - C

SP = C + MU 2. A jacket which costs PHP1,350 is being sold at PHP2,025.

What is the rate of mark up based on cost?
C = SP - MU

C = 1,350
SP = 2,025 MU% = MU
MU
MU = ?  C
MU% C
SP MU% = ? MU% = 675
MA%
1,350
MU = SP – C MU% = 0.5
MU = 2,025 – 1,350 MU% = 50%
MU = 675
MU = SP - C
3. Peter decides to impose a mark up of PHP5 on each pen he
SP = C + MU
sells to his friends and classmates. This represents a 20%
C = SP - MU mark up based on selling price. Find the cost and the selling
price of the pens Peter sells.

MU
MU = 5 SP = MU
MU% C MA% = 20% MA% C = SP – MU
MA% SP
C=? SP = 5 C = 25 – 5
SP = ?  20% C = 20
SP = 25
Application in Real Life
Mark Up
 BUYS SELLS
BED B ED
FOR 20 FOR 25
, 3 10 ,386

The retailer buys bed in the factory that cost PHP 20,310 for each bed and adds PHP
5,076 as his value and sells each bed to the final consumer at PHP 25,386. Mark up
often use by retail companies (e.g., clothing, grocery, and department stores).