Markups & Markdowns

Front

What is a markup?

Back

A markup is the amount added to the cost price of a product to determine its selling price. It is usually expressed as a percentage of the cost price.

Front

What is a markdown?

Back

A markdown is a reduction in the original selling price of a product. It is often used to encourage sales and is expressed as a percentage of the original price.

Front

How do you calculate the discount amount?

Back

The discount amount can be calculated by multiplying the original price by the discount rate (as a decimal).

Front

What is the formula to find the selling price after a discount?

Back

Selling Price = Original Price - Discount Amount.

Front

How do you calculate the discount rate?

Back

Discount Rate = (Discount Amount / Original Price) x 100%.

Front

If an item costs $50 and is marked up by 20%, what is the selling price?

Back

Selling Price = $50 + ($50 x 0.20) = $60.

Front

If an item is sold for $80 after a 20% markdown, what was the original price?

Back

Original Price = Selling Price / (1 - Markdown Rate) = $80 / (1 - 0.20) = $100.

Front

What is the relationship between wholesale price and selling price?

Back

The selling price is typically higher than the wholesale price due to markups applied by retailers.

Front

How do you find the original price if you know the selling price and the discount rate?

Back

Original Price = Selling Price / (1 - Discount Rate).

Front

What is the formula for calculating the markup rate?

Back

Markup Rate = (Markup Amount / Cost Price) x 100%.