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)
 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.
•Determine the rate of markup.
 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. Duke’s 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
 QUIZ
1.What is the selling price for a CD which costs the
retailer 28.00 and is marked up 70% based on cost?

2.What is the selling price for a set of hairbrushes

which cost the salon 112.00 and is marked up 40%
based on cost?
3. A boutique pays 45 a pair for handmade earrings
and sells them at a 50% markup based on cost. Find
the selling price of the earrings. Find the markup?
 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
 Find the cost when the selling price and the
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
1. Find the cost of a box of ballpoint pens
which has been marked up $4 and has a
markup rate of 40%.
2.What is the selling price for a set of
hairbrushes which cost the salon $12.00 and is
marked up 150% based on cost?
•3. What is the selling price for a set of
hairbrushes which cost the salon $22.00 and
is marked up 250% based on cost?
 Markup based on selling
price and markup comparisons
 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: $151.5

• 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 500 +R ? +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%.
•If a calculator is marked up 60% based
on cost, what is the corresponding
percent markup based on selling price?
A Panasonic stereo is marked up 25%
based on selling price at Circuit City.
What is the corresponding percent
markup based on cost? Round to the
nearest tenth of a
percent.
Converting Percent Markup Based on Selling
Price to Percent Markup Based on Cost
 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)