Tax, Tip, Commission, Discount, Markup, & Markdown Review

Front

What is sales tax?

Back

Sales tax is a percentage of the sale price that is added to the total cost of a purchase, collected by the seller and paid to the government.

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How do you calculate the total cost with sales tax?

Back

To calculate the total cost with sales tax, multiply the price by the sales tax rate (as a decimal) and add that amount to the original price.

Front

What is a markup?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit, usually expressed as a percentage of the cost.

Front

How do you calculate the retail price using markup?

Back

Retail Price = Cost Price + (Cost Price × Markup Percentage).

Front

What is a discount?

Back

A discount is a reduction in the price of a product or service, usually expressed as a percentage of the original price.

Front

How do you calculate the sale price after a discount?

Back

Sale Price = Original Price - (Original Price × Discount Percentage).

Front

What is a markdown?

Back

A markdown is a permanent reduction in the original selling price of a product.

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What is a commission?

Back

Commission is a fee paid to an agent or employee for facilitating a sale, usually calculated as a percentage of the sale amount.

Front

How do you calculate the commission earned?

Back

Commission Earned = Sale Amount × Commission Rate.

Front

What is the difference between markup and markdown?

Back

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