Question

If the rate of markup based on selling price is 63%, what is the rate of cost based on selling price?

a) 137%
b) 37%
c) Cannot be calculated with provided data
d) 26%

Answer 1

The rate of cost based on selling price when the markup is 63% on the selling price is 37%. This is because the cost makes up the remaining percentage of the selling price after the markup percentage is accounted for.

Step-by-step explanation:

If the rate of markup based on selling price is 63%, this means that the markup is 63% of the selling price. We can express the markup as 0.63 times the selling price (SP). Considering that the selling price is composed of the cost (C) and the markup, we have SP = C + 0.63SP.

To find the rate of cost based on the selling price, you need to express the cost as a percentage of the selling price. We can rearrange the previous equation to solve for C: C = SP - 0.63SP = 0.37SP.

This means that the cost is 37% of the selling price, hence option b) 37% is the correct answer.