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Contemporary Mathematics
for Business and Consumers
Third Edition
By: Robert A. Brechner
COPYRIGHT © 2003 by South-Western, a division of Thomson Learning. Thomson Learning TM is a trademark
used herein under license. ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be
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Chapter 8
Markup and Markdown
Copyright © 2003 by South-Western.
Chapter 8, Markup and Markdown
Section I Markup Based on Cost
8-1 Understanding and using the retailing equation to find
cost, amount of markup, and selling price.
8-2 Calculating percent markup based on cost.
8-3 Calculating selling price when selling price and
percent markup based on cost are know.
8-4 Calculating cost when selling price and percent
markup based on cost are known.
Chapter 8, Markup and Markdown
(Cont.)
Section II Markup Based on Selling Price
8-5 Calculating percent markup based on selling price.
8-6 Calculating selling price when cost and percent
markup based on selling price are known.
8-7 Calculating cost when selling price and percent
markup based on selling price are known.
8-8 Converting percent markup based on cost to percent
markup based on selling price, and vice versa.
Chapter 8, Markup and Markdown
(Cont.)
Section III Markdowns, Multiple Operations, and
Perishable Goods
8-9 Determining the amount of markdown and the
markdown percent.
8-10 Determining the sale price after a markdown and the
original price before a markdown.
8-11 Computing the final selling price after a series of
markups and markdowns.
8-12 Calculating selling price of perishable goods.
Section I, Markup Based on Cost
Cost of Goods Sold
Markup, Markon, Margin
Markup based on cost
Markdown
Sale price
Seasonal goods
Operating Expenses, or Overhead
Retailing equation
Markup based on selling price
Markdown cancellation
Staple goods
Perishable goods
Everybody’s Business
Many Retailers use a psychological pricing strategy known
as odd pricing, whereby prices are set to end in odd
numbers such as $.79, $2.47, or $9.95.
Theoretically, customers perceive odd prices as being
substantially below even prices, and therefore a bargain.
For example, $299.95 is “perceived” as being much lower
than $300.00.
Retailers, to psychologically project a prestigious image
for their products, use even pricing such as $10.00 or
$50.00.
8-2 Calculating Percent Markup Based on
Cost
Percent markup based on cost (rate = Markup (portion) or % Mcost = M
Cost (base)
C
8-3 Calculating Selling Price When Cost and Percent
Markup Based on Cost are Known
Selling price = Cost (100% + Percent markup based on cost)
SP = C (100% + % Mcost)
8-4 Calculating cost When Selling Price and
Percent Markup Base on Cost Are Known
Cost = ___Selling price__
100% + Percent markup on cost
C = ____SP___
100% + %Mcost
Section II, Markup Based on Selling
Price
8-5 Calculating Percent Markup Based on Selling Price
Percent markup based on selling price (rate) = Markup (portion)
Selling price (base)
or
%Msp=M
SP
8-8 Converting Percent Markup Based on Cost to Percent
markup Based on Selling Price, And Vise Versa
Percent markup based on selling price =
Percent markup based on cost
100% + Percent markup based on cost
Converting Percent Markup Base on
Selling Price to Percent Markup Based on
cost
Percent markup based on cost = Percent markup based on selling price
100% - Percent markup based on selling price
Section III, Markdowns, Multiple
Operations, and Perishable Goods
8-9 Determining the Amount of Markdown and the
Markdown Percent
Amount of markdown Percent = Original selling price – Sale price
Markdown percent = Amount of markdown
Original selling price
Everybody’s Business
Note that markdown percent calculations are an
application of rate of decrease, covered in Chapter
6.
In the percentage formula, the markdown (portion)
represents the amount of the decrease, and the
original selling price (base) represents the original
amount.
8-10 Determining the Sale Price a After a Markdown
and the Original Price Before a Markdown
Sale price = Original selling price(100% - Markdown percent)
Finding the Original Price before a Markdown
Original selling price =
Sale price
100% - Markdown percent
Everybody’s Business
In a series of markups and markdowns, each
calculation is based on the previous selling
price.
8-12 Calculating the Selling Price of
Perishable Goods
Selling of perishables = Total expected selling price
Total quantity – Anticipated spoilage
Chapter 8, Section I
Selling price = Cost + Markup
Cost = Selling price - Markup
Markup = Selling price - Cost
Percent markup
COST
= Markup
Percent markup
SP
=
Cost
Markup
Selling price
Selling price = Cost ( 100% + % Markup
COST
)
Copyright © 2003 by South-Western
Chapter 8, Section I
Cost
=
Selling price
100% + % Markup
Selling price
COST
Cost
100% - % Markup
=
SP
Cost = Selling price (100% - %Markup SP )
%Markup SP
%Markup COST
=
=
%Markup COST
100% + %Markup
COST
%Markup SP
100% - %Markup SP
Copyright © 2003 by South-Western
Chapter 8, Section I
Markdown = Original price - Sale price
Sale price = Original price - Markdown
Original Price = Sale price + Markdown
Markdown
Original price
Markdown% =
Sale price = Original price (100% - Markdown%)
Original price
Selling price
Sale price
100% - Markdown%
=
PERISHABLES
=
Expected selling price
Total quantity - Spoilage
Copyright © 2003 by South-Western