CH09 PPT

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 2009 Pearson Education, Inc. Upper Saddle River, NJ
Cleaves/Hobbs 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.
Markup = Selling price Cost
Cost = Selling price - Markup
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
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%
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.
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.
Rate of markup based on cost
The shirt Cost $10 Rate of 100%

cost
+Markup $5 + Rate of ?
markup
=Selling $15 = Rate of ?
price 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?
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%
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%
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 $5 Rate of Cost 100%
+Mark-up ? Rate of markup +50%
=Selling price ? 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
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
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 100%
+MU 6.50 +RMU 40%
= SP ? = RSP 140%
Find the cost by dividing the markup
amount by the markup rate
Cost = Markup
Markup rate
Cost = $6.50
40% [or 0.4]
Cost = $16.25
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
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%
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
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
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)
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.
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%.
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
= Selling price $10 = Rate of 100%
Selling price
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.
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%
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
Find the cost and selling price
if a handbag is marked up $5 with a
20% markup rate based on selling price
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
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
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
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%
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
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
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
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%
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% Cost 1500 RC ?
+MU +R 500 ? +MU 500 +R ?

MU MU
= SP 2000 =RSP ? =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?
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.
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%.
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.
Find the amount of markdown,
the reduced (new) price and
the percent of the markdown
The original selling price

is always 100%
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%.
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 $6 ?
= New Price $30 ?
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.
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
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.
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)

CH09 PPT

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Markup and Markdown

Find the cost, markup or selling price

Find the cost when the amount of markup

Cost = Selling price - Markup

If an item costs $16 and is sold for $20, what is

When the markup is based on cost

The rate of cost is always 100%

Using the formula

Change the equation so the rate of markup

The shirt Cost $10 Rate of 100%

2. What you are looking for?

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

$5 divided by $10 is equal to .5 or 50%

Rate of markup [based on cost] is equal to

1. Dukes photography pays $9 for a 5x7

2. Lilly buys tea from England for $4 a box and

A boutique pays $5 a pair for handmade

+Mark-up ? Rate of markup +50%

=Selling price ? Rate of SP =150%

The rate of the selling price is found by

Selling price = Rate of selling price

What is the selling price for a CD which costs

What is the selling price for a set of

A DVD movie is marked up $6.50 which

+MU 6.50 +RMU 40%

Find the cost of a box of ballpoint pens which

Find the cost of a pair of shoes that has been

A camera sells for $20. The markup rate

+Markup ? +RMU 50%

= Selling price $20 = RSP 150%

Cost = Selling price

Find the cost and markup of a

Find the amount of markup and the percent

Find the selling price when the amount of

Find the selling price when the cost and the

In the previous section, the markup based

In this section, the markup based on selling

A calculator costs $5 and sells for $10.

The markup amount is the difference

Divide the markup by the selling price to get

A dog collar which costs $4 and sells for

A notebook which costs $1.25 and sells for

Subtract the percent of markup from 100% to

Divide the markup by the rate of markup based

A cell phone which has been marked up $50

A pair of socks which has been marked up $3

Subtract the rate of markup from 100% to

Selling price = Cost [divided by]

What is the selling price?

A handheld calculator that costs the retailer $2

A box of gourmet chocolates that costs $8 a box

Subtract the rate of markup from the rate

Cost = Rate of Cost x Selling Price

First, find the rate of cost.

= SP $2.99 = RSP 100%

Find the markup based on cost and the

Cost 1500 RC 100% Cost 1500 RC ?

+MU +R 500 ? +MU 500 +R ?

The percentage of markup based on cost is

The percentage of markup based on selling

What accounts for the difference?

The markup rate based on cost is

The markup rate based on selling price is