Mark-up, Mark-on, and

Markdown
Business Mathematics
 OBJECTIVES
At the end of this lesson, you will be able to differentiate
and illustrate Mark-on, Markdown, and Mark-up
TERMS TO REMEMBER
Selling Price is the amount at which the product is to be
sold.

Cost Price is the total cost involved in selling a product.

This involves purchase price (fixed cost) and all other
expenses (variable cost) that are incurred before a
product is sold.
MARK-UP
Mark-up is the difference between the selling price and
the cost price. It is computed based on the mark-up
percentage.
MARK-UP PERCENTAGE
Mark-up Percentage is a percentage of the cost price that
the company wanted to add to determine the selling price
of the product.
 EXAMPLE EXAMPLE 1
How much must be the selling price of a monoblock table with a cost price of
Php 525 if the desired mark-up percentage is 28%?

Mark up percentage= 28% 𝑆𝑜𝑙𝑢𝑡𝑖𝑜𝑛

Cost price= 525 𝑀𝑎𝑟𝑘 𝑢𝑝 𝑎𝑚𝑜𝑢𝑛𝑡 =28 % ×525
𝑀𝑎𝑟𝑘 𝑢𝑝 𝑎𝑚𝑜𝑢𝑛𝑡 =147

𝑀𝑎𝑟𝑘𝑢𝑝𝑎𝑚𝑜𝑢𝑛𝑡=𝑆𝑒𝑙𝑙𝑖𝑛𝑔𝑝𝑟𝑖𝑐𝑒−𝐶𝑜𝑠𝑡𝑝𝑟𝑖𝑐𝑒
𝑻𝒉𝒆𝒓𝒆𝒇𝒐𝒓𝒆 𝒕𝒉𝒆 𝒔𝒆𝒍𝒍𝒊𝒏𝒈 𝒑𝒓𝒊𝒄𝒆𝒐𝒇 𝒂𝒎𝒐𝒏𝒐𝒃𝒍𝒐𝒄𝒌𝒕𝒂𝒃𝒍𝒆 𝒊𝒔 𝑷𝒉𝒑 .𝟔𝟕𝟐 .𝟎𝟎
 EXAMPLE EXAMPLE 2
How much was the cost price of a backpack sold for Php 381.90 if the mark-up
percentage is 34%?

Mark up percentage= 34% 𝑆𝑜𝑙𝑢𝑡𝑖𝑜𝑛

Selling price= 381.90 𝑀𝑎𝑟𝑘 𝑢𝑝 𝑎𝑚𝑜𝑢𝑛𝑡 =34 % × 𝐶
𝑀𝑎𝑟𝑘 𝑢𝑝 𝑎𝑚𝑜𝑢𝑛𝑡 =0.34 𝐶

𝑀𝑎𝑟𝑘𝑢𝑝𝑎𝑚𝑜𝑢𝑛𝑡=𝑆𝑒𝑙 𝑖𝑛𝑔𝑝𝑟𝑖𝑐𝑒−𝐶𝑜𝑠𝑡 𝑝𝑟𝑖𝑐𝑒

𝑻𝒉𝒆𝒓𝒆𝒇𝒐𝒓𝒆 𝒕𝒉𝒆 𝒄𝒐𝒔𝒕 𝒑𝒓𝒊𝒄𝒆 𝒐𝒇 𝒕𝒉𝒆 𝒃𝒂𝒄𝒌𝒑𝒂𝒄𝒌 𝒊𝒔 𝑷𝒉𝒑 𝟐𝟖𝟓
MARK-ON
Mark-on is a temporary mark-up on certain products to take advantage of
the high demand during peak sales like the weeks prior to Christmas,
opening classes, Mother ’s day, graduation month, etc. Mark-on is used to
temporarily maximized earnings and the price is usually returned to its
original selling price when the demand for the product is on a normal level.
 EXAMPLE EXAMPLE 3
A fast-selling item in a department store is currently being sold for Php 675.35.
Because of high demand for the item, the store decided to apply a mark-on
percentage of 22%. Find the new selling price.

𝑆𝑜𝑙𝑢𝑡𝑖𝑜𝑛
Mark on percentage= 22%
𝑀𝑎𝑟𝑘 𝑜𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 =22 % × 675.35
Selling price= 675.35
𝑀𝑎𝑟𝑘 𝑜𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 =148.58

𝑀𝑎𝑟𝑘 𝑜𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 =𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒− 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑠𝑒𝑙𝑙𝑖𝑛𝑔𝑝𝑟𝑖𝑐𝑒

148.58=𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒 − 675.35
148.58+ 67 5 .35= 𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒
82 3 .93=𝑁𝑒𝑤 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒
𝑻𝒉𝒆𝒓𝒆𝒇𝒐𝒓𝒆 𝒕𝒉𝒆 𝒏𝒆𝒘 𝒔𝒆𝒍𝒍𝒊𝒏𝒈 𝒑𝒓𝒊𝒄𝒆 𝒐𝒇 𝒂𝒏 𝒊𝒕𝒆𝒎 𝒊𝒔 𝑷𝒉𝒑 𝟖𝟐𝟑 .𝟗𝟑
MARKDOWN
Markdown is defined as a reduction in the selling price of the merchandise.
The cause of a markdown may be to stimulate the sale of slow-moving
products. Some may use markdown to drive competitors out of business.
 EXAMPLE EXAMPLE 4
How much markdown percentage was applied to a jacket whose previous price
of Php 798 is now sold for 653.36?

𝑆𝑜𝑙𝑢𝑡𝑖𝑜𝑛
Current selling price= 798
𝑀𝑎𝑟𝑘 𝑜𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 =798 −653.36
New selling price= 653.36
𝑀𝑎𝑟𝑘 𝑜𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 =144.64

𝑀𝑎𝑟𝑘 𝑜𝑛 𝑎𝑚𝑜𝑢𝑛𝑡 =𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 % ×𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑠𝑒𝑙𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒

144.64=𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 % ( 798)
144 .64
=𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 %
798
18. 13 %=𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 %
𝑻𝒉𝒆𝒓𝒆𝒇𝒐𝒓𝒆 𝒕𝒉𝒆 𝒎𝒂𝒓𝒌𝒅𝒐𝒘𝒏 𝒑𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒊𝒔 𝟏𝟖 .𝟎𝟓 %
 EXAMPLE EXAMPLE 5
Find the previous selling price of a shirt which now sells at Php 219 which was
given a markdown percentage of 27%.

𝑀𝑎𝑟𝑘 𝑑𝑜𝑤𝑛𝑎𝑚𝑜𝑢𝑛𝑡 =27 % × 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑆𝑒𝑒𝑙𝑖𝑛𝑔 𝑝𝑟𝑖𝑐𝑒

Markdown percentage= 27%
𝑀𝑎𝑟𝑘 𝑑𝑜𝑤𝑛𝑎𝑚𝑜𝑢𝑛𝑡 =0.27 𝐶
New selling price= 219

𝑆𝑜𝑙𝑢𝑡𝑖𝑜𝑛
0.27 𝐶=𝐶 −219
2 19=𝐶 − 0.27 𝐶
2 19=0.73 𝐶
2 19 0.73 𝐶
=
0.73 0.73
3 00=𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑆𝑒𝑒𝑙𝑖𝑛𝑔𝑝𝑟𝑖𝑐𝑒
MARGIN
Margin is defined as the difference between the selling price and the cost
price. Gross Margin or Profit Margin is numerically equal to the mark-up.
Gross Margin is based on the selling price of the product rather than its cost
price.
 EXAMPLE EXAMPLE 6
Compare the mark-up percentage and gross margin of a rubber shoes with a
cost price of Php 1,765 and a selling price of Php 2,153.33.

Selling price= 2, 153.33

Cost price= 1, 765 𝐺𝑟𝑜𝑠𝑠 𝑚𝑎𝑟𝑔𝑖𝑛 %=(𝑀𝑎𝑟𝑘𝑢𝑝𝑎𝑚𝑜𝑢𝑛𝑡
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒)100

(
388.33
)
𝑀𝑎𝑟𝑘𝑢𝑝𝑎𝑚𝑜𝑢𝑛𝑡=𝑆𝑒𝑙𝑙𝑖𝑛𝑔𝑝𝑟𝑖𝑐𝑒−𝐶𝑜𝑠𝑡𝑝𝑟𝑖𝑐𝑒
𝐺𝑟𝑜𝑠𝑠 𝑚𝑎𝑟𝑔𝑖𝑛 %= 100
2153.33

𝐺𝑟𝑜𝑠𝑠 𝑚𝑎𝑟𝑔𝑖𝑛 %=18 %

𝑀𝑎𝑟𝑘𝑢𝑝𝑎𝑚𝑜𝑢𝑛𝑡%=
Markupamount
cost price(100)
 SEATWORK SEATWORK

1. How much was the cost price of a backpack sold for Php 381.90 if the
mark-up percentage is 34%?
2. Find the previous selling price of a shirt which now sells at Php 219
which was given a markdown percentage of 27%?
3. A Bedan thought for the day: Knowing whether to give a mark-on or a
markdown in a product needs the skill to analyze the demand of its
customers. In your own way have you been sensitive to the needs of
others? Cite an example.