Question

Which statement defines the term markup?

the extra amount added to the selling price to arrive at the cost price
the extra amount added to the cost price to arrive at the selling price
the extra amount added to the marginal cost to arrive at the selling price

Answer 1

Answer: Second option is correct.

Explanation:

Markup is the extra amount added to the cost price to arrive at the selling price.

As in retail market , cost price is always marked up by the retailers to make some profit and cover overhead expenses.

So, Markup is that amount that is added to the cost price.

Discount is also given to that amount only, to increase his goodwill.

Hence, Second option is correct.

Answer 2

In retail, a markup is a ratio. It is the extra amount added to the cost price to arrive at the selling price. Markup is generally expressed as a percentage, while the cost is a whole number.