Question

A shop owner purchases items to sell in her store. She purchases a lamp for $140 and sells it for $200. Calculate the following. (NOTE: Show all calculations).a. dollar markupb. markup percentage on costc. markup percentage on selling price

Answer 1

a. $60, b. 42.86% c. 30%

Step-by-step explanation:

Cost of the lamp = $140

Selling price = $200

a. dollar markup = Selling price - cost price = $60

b. markup percentage on cost =
`(mark\ up)/(cost\ price) \` = $60/140 = 42.86% approx

c. markup percentage on sales =
`(mark\ up)/(sales\ price)` = $60/200 = 30%

Mark up refers to the price above cost which a seller charges to cover costs and profit.

While calculating markup percentage, either cost can be taken as a base which would refer to mark up percentage on cost or else sales price can be taken as a base which is referred to as markup percentage on selling price.