Percent Markups The difference between the selling price of a piece of merchandise and the price paid for it is called markup For example if a dealer purchases an item from the factory for 40 and sold it for 50 we say that the markup was 10 Ten dollars is 25 percent of 40 but is only 20 pe ID: 548880
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Slide1
Lesson 101:
Percent MarkupsSlide2
The difference between the selling price of a piece of merchandise and the price paid for it is called markup. For example, if a dealer purchases an item from the factory for $40 and sold it for $50, we say that the markup was $10. Ten dollars is 25 percent of $40 but is only 20 percent of $50. thus, the markup was 20 percent of the selling price and 25 percent of the purchase price. The store owner would say that the markup was only 20%, but the customer would say that the markup was 25%.Slide3
The selling price is the purchase price plus the markup.
Selling price = purchase price + markupSlide4
Any one of these components can be expressed as a percentage of any other component.
When we work with these problems, we will use rate instead of percent. Rate is percent divided by 100 and is the decimal form of the relationship.
20% equals a rate of 0.2
415 % equals a rate of 4.15
2% equals a rate of 0.02Slide5
Example:
The selling price was $48. if the markup was 20% of the purchase price, what was the purchase price? What was the markup?Slide6
Answer:
48 = P + 0.2P
48 = 1.2P
40 = P
$40 and the markup was $8
P P
P
PSlide7
Example:
The purchase price of the item was $1800. If the markup was 40% of the selling price, what was the selling price?Slide8
Answer:
S = 1800 + 0.4S
0.6S = 1800
S = 3000
$3000Slide9
Example:
The sports car retailed for $10,368. what was the purchase price if the car had been marked up 8 percent of the purchase price?Slide10
Answer:
10,368 = P + 0.08P
10,368 = 1.08P
9600 = P
$9600Slide11
HW: Lesson 101 #1-30