Business Mathematics: Selling - Cost as The Base

When cost is used as the base for markup percent, it is sometimes referred to as “markon.” It has the advantage of expressing clearly the fact that the price increase is directly added to the base (cost).

Example
A record album that sells for $6 costs $4. What is the percent markup based on cost?

To calculate the cost from the percent markup and the selling price, we solve the preceding formula for cost as follows:

Since markup = selling price - cost, by substitution we have

Note that the denominator of this equation [(% markup/100) ÷ 1] is simply 1 plus the percent markup expressed as a decimal.


Example
If an item selling for $72 has a 20% markup on cost, what is the cost?

To calculate selling price from cost and percent markup, we restate the formula

By substitution we have

Note that % markup/100 is simply the percent expressed as a decimal.


Example
If a sweater which costs $10 has a markup of 30% on cost, what is the selling price?

Alternative solution:
If we let cost = 100%, then

Solved Problems:

9.11  Jones Company purchases radios at $150 each. Their markup based on cost is 25%. What is the selling price?
 

Solution


9.12 Calvin Jenks purchases designer jeans at $17.95 a pair. The markup based on cost is 41%. What is the selling price?
 

Solution
Selling price = $17.95 + (0.41 × 17.95) = $17.95 + $7.36 = $25.31

9.13  Nail polish is sold by the manufacturer at $2.50. The dealer’s markup is 35% on retail. What is the selling price?
Solution


9.14  Hondor, Inc. purchased a microwave oven for $295.71 and wants to mark up 40% on retail. What must the selling price be?
 

Solution


9.15  A boutique buys handbags for $19.28 and wants a markup of 56% on retail. Find the selling price.
 

Solution


9.16 June’s Boutique plans to sell an ascot for $9.59. Her markup on cost is 75%. What is her cost? '
 

Solution

Alternative solution:


9.17  Solco TV & Appliances sells television sets for $674. Their markup on cost is 92%. Find their cost.
 

Solution


9.18  Jones, Ltd. sells a recliner for $479.57. If their markup is 40% on retail, what is their cost?
 

Solution


9.19   A retailer sells a pair of shoes for $52.79. If his markup is 67% of retail, what is his cost?
 

Solution


194.9   A suit sells for $249.50 and carries a markup of 42% on retail. Find the cost of the suit.
 

Solution