Markup and Markdown

Front

What is markup?

Back

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 markdown?

Back

Markdown is a reduction in the original selling price of a product. It is often used to encourage sales and clear out inventory.

Front

How do you calculate the final price including sales tax?

Back

Final Price = Original Price + (Original Price × Sales Tax Rate). For example, for a $990 T.V. with a 9% tax: Final Price = $990 + ($990 × 0.09) = $1,079.10.

Front

What is the formula to calculate the sale price after a discount?

Back

Sale Price = Original Price - (Original Price × Discount Rate). For example, if a pair of boots costs $94.99 and has a 25% discount: Sale Price = $94.99 - ($94.99 × 0.25) = $71.24.

Front

If a shirt is on sale for $20.00 and this is 15% off the original price, how do you find the original price?

Back

Original Price = Sale Price / (1 - Discount Rate). For example, Original Price = $20.00 / (1 - 0.15) = $23.53.

Front

What is the sales tax rate if the total cost is $19.03 for an item priced at $17.95?

Back

Sales Tax Rate = (Total Cost - Price) / Price. For example, Sales Tax Rate = ($19.03 - $17.95) / $17.95 = 0.06 or 6%.

Front

How do you calculate the retail price using markup?

Back

Retail Price = Cost Price + (Cost Price × Markup Rate). For example, if the wholesale price is $57 and the markup is 150%: Retail Price = $57 + ($57 × 1.5) = $142.50.

Front

What does a 25% discount mean?

Back

A 25% discount means that the price of an item is reduced by 25% of its original price. For example, if an item costs $100, a 25% discount would reduce the price by $25.

Front

What is the difference between markup and markdown?

Back

Markup increases the price of an item above its cost, while markdown decreases the price of an item below its original selling price.

Front

How do you find the percentage of a number?

Back

Percentage = (Part / Whole) × 100. For example, to find what percentage 25 is of 200: Percentage = (25 / 200) × 100 = 12.5%.