Selling
Markup Based on Cost
Cost
 The amount paid by a business to the manufacturer or
supplier after trade discounts and other discounts have
been applied.
Selling Price
 The price at which merchandise is offered for sale to
the public.
Markup
 AKA “Margin” or “Gross Profit”
 The difference between cost and selling price. That is,
how much a business increases the price of an item
when they sell it so that they can make a profit.
Formula
Selling Price = Cost +
Markup
Example 1
 If a television costs a business $190 and they sell it for
$300. What is the markup amount?
Example 1
 If a television costs a business $190 and they sell it for
$300. What is the markup amount?
 Answer: $110
Example 1
 If a television costs a business $190 and they sell it for
$300. What is the markup amount?
 Answer: $110
 What percent of the cost is the markup amount?
Example 1
 If a television costs a business $190 and they sell it for
$300. What is the markup amount?
 Answer: $110
 What percent of the cost is the markup amount?
 The markup amount is ___% of the cost.
Example 1
 If a television costs a business $190 and they sell it for
$300. What is the markup amount?
 Answer: $110
 What percent of the cost is the markup amount?
 The markup amount is 57.9% of the cost.
Example 2
 A school supply company sells scientific calculators for
$15. The calculators cost the company $10 each. What is
the markup amount and the markup percent on cost?
Example 2
 A school supply company sells scientific calculators for
$15. The calculators cost the company $10 each. What is
the markup amount and the markup percent on cost?
 Markup Amount: $15 - $10 = $5
Example 2
 A school supply company sells scientific calculators for
$15. The calculators cost the company $10 each. What is
the markup amount and the markup percent on cost?
 Markup Amount: $15 - $10 = $5
 The markup amount is ____% of the cost.
Example 2
 A school supply company sells scientific calculators for
$15. The calculators cost the company $10 each. What is
the markup amount and the markup percent on cost?
 Markup Amount: $15 - $10 = $5
 The markup amount is ____% of the cost.
 $5 is ____% of $10.
Example 2
 A school supply company sells scientific calculators for
$15. The calculators cost the company $10 each. What is
the markup amount and the markup percent on cost?
 Markup Amount: $15 - $10 = $5
 The markup amount is ____% of the cost.
 $5 is ____% of $10.
 $5 is 50% of $10.
Operating Expenses
 AKA “Overhead”
 The expenses that come from operating a business
such as:
 Wages and salaries for employees
 Rent for the building
 Utilities
 Insurance
 Advertising expenses
Revenue
 The amount of money a business makes by selling
their products.
 Example: If lemonade sells for $0.50 per glass and
Stacie sells 25 glasses of lemonade. Her revenue is
$12.50
Net Profit
Examples to Turn In (Exit Slip)
1. Carlene sells candles at her store in Utah.
Each candle costs her $8 and she sells them
for $12. Find the markup percentage on cost.
2. Garrett sells staplers in Canton, Pennsylvania.
The staplers cost him $3.50 each. He sells
them at a 40% markup on cost. What is the
selling price of his staplers?