MARKUP AND

MARKDOWN
BUSINESS MATH
 Markup and Markdown

 Find the cost, markup or selling price when any

two of the three are known.
 Find the percent of markup based on the cost
when the cost and selling price are known.
 Find the selling price when the cost and percent
of markup based on the cost are known.
(continued)
 Markup and Markdown
(continued)

 Find the cost when the amount of markup and the

percent of markup based on the cost are known.
 Find the cost when the selling price and the
percent of markup based on the cost are known.
Markup = Selling price – Cost

Cost = Selling price - Markup

 Try these examples

If an item sells for P20 and has a markup of

PHP12, what is the cost of the item?
Answer: PHP8

If an item costs PHP16 and is sold for PHP20,

what is the markup of that item?
Answer: PHP4
 Find the percent of markup based on the
cost
when the cost and selling price are known

When the markup is based on cost

The rate of cost is always 100%

A retailer can buy a shirt from a
wholesaler at PHP10.00.
 The retailer will add PHP5.00 to the cost.
 The retailer then sells it for PHP15.00.
 P=RxB

Using the formula

Markup = rate of markup x cost

Change the equation so the rate

of markup is equal to markup
divided by the cost.
 Rate of markup based on cost

The shirt
Cost PHP10 Rate of 100%
cost
+Markup PHP5 + Rate of ?
markup
=Selling PHP15 = Rate of ?
price Selling price
 Five Step Solution Plan
1. What you know…
Rate of cost always equals 100%; MU and C values.
2. What you are looking for?
Rate of markup and rate of selling price

3. Solution plan
Rate of markup = MU divided by cost

4. Solution
Carry out operation

5. Conclusion
Add rate of MU to C to find rate of SP. Does it make sense?
 Substitute the known values

 A shirt that costs PHP10 and sells for PHP15 has a

markup rate of 50%

 PHP5 divided by PHP10 is equal to .5 or 50%

Rate of markup [based on cost] is equal to 50%

 Try these examples

1. Duke’s photography pays PHP9 for a 5x7

photograph. If the photograph is sold for PHP15,
what is the percent of markup based on cost?
Answer:66.67%

2. Lilly buys tea from England for PHP4 a box and sells
it in “The Tea Party” for PHP12 a box. Find the
percent of markup based on cost.
Answer: 200%
 Find the selling price when the cost and percent of markup
based on the cost are known

A boutique pays PHP5 a pair for handmade earrings and

sells them at a 50% markup based on cost. Find the
selling price of the earrings.
Cost PH Rate of Cost 100%
P5

+Mark-up ? Rate of markup +50%

=Selling price ? Rate of SP =150%

 Find the selling price

 Therate of the selling price is found by

adding the rate of cost (100%) to the rate
of markup.

 Selling price = Rate of selling price

(based on cost) x cost
 Do these examples
 What is the selling price for a CD which costs the
retailer PHP8.00 and is marked up 60% based on
cost?
Answer: PHP12.80

 What is the selling price for a set of hairbrushes

which cost the salon PHP12.00 and is marked up
150% based on cost?
Answer: PHP30
Find the cost when the amount and the percent
of markup are known

A DVD movie is marked up PHP6.50 which represents a

40% markup based on cost. What is the cost of the
DVD?

Cost ? RC 100%

+MU 6.50 +RMU 40%

= SP ? = RSP 140%
 Find the cost by dividing the markup
amount by the markup rate

 Cost = Markup
Markup rate

 Cost = PHP6.50
40% [or 0.4]

 Cost = PHP16.25
 Try these two examples

 Find the cost of a box of ballpoint pens which has been

marked up PHP4 and has a markup rate of 30%.
Answer: PHP13.33

 Find the cost of a pair of shoes that has been marked up

PHP25 and has a markup rate of 50%.
Answer: PHP50
 Find the cost when the selling price and the
percent of markup based on cost are known

A camera sells for PHP20. The markup rate

is 50% of the cost. Find the cost of the camera and
the markup.

Cost ? RC 100%

+Markup ? +RMU 50%

= Selling price PHP2 = RSP 150%

0
 Find the cost by dividing the selling price
by the rate of the selling price

 Cost = Selling price

Rate of the selling price

 Cost = PHP 20
150% (or 1.5)

 Cost = PHP13.33
 Try these examples

 Find the cost and markup of a bicycle tire which

sells for PHP18 and is marked up 50% of the cost.

Answer: PHP12 and PHP6

 Find
the cost and markup of a moisturizing
cream which sells for PHP30 and is marked up
150% of the cost.
Answer: PHP12 and PHP18
 9.2 Markup based on selling
price and markup comparisons
 Findthe amount of markup and the percent
of markup based on selling price when the
cost and selling price are known.

 Findthe selling price when the amount of

markup and the percent of markup based
on selling price are known.

(continued)
 9.2 Markup based on selling price
and markup comparisons
(continued)

 Findthe selling price when the cost and the

percent of markup based on the selling price
are known.
 Findthe cost when the selling price and the
percent of markup based on the selling price
are known.
 Comparethe markup based on cost with the
markup based on selling price.
 Take note!

 Inthe previous section, the markup based on

cost, the rate of cost was always 100%.

 In this section, the markup based on selling

price, the rate of selling price is always 100%.
 Find the amount of markup
and the percent of markup

A calculator costs PHP5 and sells for PHP10. Find

the rate of markup based on the selling price.

Cost PHP5 Rate of Cost ?

+Markup ? +Rate of Markup ?

= Selling price PHP1 = Rate of 100%

0 Selling price
 Find the rate of markup by dividing the markup
by the selling price and multiplying it by 100%

 The markup amount is the difference between the

selling price and the cost.

 Divide the markup by the selling price to get the

difference and then multiply it by 100%, to get the rate
of markup.
 Find the amount of markup and the percent of
markup (based on SP ) for the following items:

 A dog collar which costs PHP4 and sells for PHP10.

Answer: PHP6 and 60%

 A notebook which costs PHP1.25 and sells for PHP2.

Answer: PHP.75 and 37.5%
 Find the selling price when the amount
of markup and the percent of markup
based on the selling price are known

 Subtract the percent of markup from 100% to obtain the

rate of cost.

 Divide the markup by the rate of markup based on SP

 Find the cost and selling price
if a handbag is marked up PHP5 with a
20% markup rate based on selling price

Cost ? RC ?

+ MU PHP5 +RMU 20%

= SP ? = RSP 100 %
 Find the selling price and
the amount of the markup

 SP = Markup
Rate of Markup based on selling price

 SP = PHP5
20% or [0.2]

 SP = PHP 25
 Find the selling price and
amount of markup based on
selling price for the following items:

 A cell phone which has been marked up PHP50 and with a

markup rate of 33% based on selling price.
Answer: PHP150

 A pair of socks which has been marked up PHP3 and with

a markup rate of 60% based on selling price.
Answer: PHP5
 Find the selling price when the
cost and the percent of markup
based on selling price are known

 Subtract the rate of markup from 100% to determine the

rate of cost.

 Selling price = Cost [divided by]

Rate of Cost based on SP
 Find the selling price and markup for
a pair of jeans which costs the retailer PHP28

What is the selling price?

Cost PHP28 RC ?

+ MU ? + RMU 30%

= SP ? = RSP 100%
 To find the selling price,
divide the cost by the rate of cost

 SP = Cost
Rate of cost

 SP = PHP28
70% [ = 0.7]

 SP = PHP40
 Find the selling price and markup (based on
selling price) for the following items:

A handheld calculator that costs the retailer PHP2 and is

marked up 60%.
Answer: PHP5 and PHP3

A box of gourmet chocolates that costs PHP8 a box and is

marked up 75%.
Answer: PHP32 and PHP24
 Find the cost when the selling
price and percent of markup
based on selling price are known

Subtract the rate of markup from the rate of selling price to determine the rate of cost.

Cost = Rate of Cost x Selling Price

Find the markup and cost of a box of pencils that sells for PHP2.99
and marked up 25% of the selling price

First, find the rate of cost.

Cost ? RC ?

+ MU ? +RMU 25%

= SP PHP2.9 = RSP 100%

9
Compare the markup based on cost
with markup based on selling price

Find the markup based on cost and the

markup based on selling of a computer that
costs PHP1,500 and sells for PHP2,000.

Cost 1500 RC 100% Cost 1500 RC ?

+MU 500 +R ? +MU 500 +R ?

MU MU
= SP 2000 =RSP ? =SP 2000 =RSP 100%
 What is the difference?

 The percentage of markup based on cost is 33.33%.

 The percentage of markup based on selling price is 25%.

 What accounts for the difference?

 Converting a markup based on
selling price to a markup based on cost

The markup rate based on cost is equal to the

markup rate based on selling price divided by
100% minus the markup rate based on selling
price.
 Converting a markup
based on cost, to a markup
based on selling price

The markup rate based on selling price is

equal to the markup rate based on cost
divided by the markup rate based on cost
plus 100%.
 9.3 Markdown, Series of
Markdowns and Perishables

 Find the amount of markdown, the reduced (new) price,

and the percent of the markdown.
 Find the final selling price for a series of markup and
markdowns.
 Find the selling price for a desired profit on perishable
and seasonal goods.
 Find the amount of markdown,
the reduced (new) price and
the percent of the markdown

The original selling price

is always 100%
 Find the markdown and
rate of markdown

 The markdown is found by subtracting the new price

from the original price.

 The markdown rate is found by dividing the markdown

by the original price and multiplying that figure by
100%.
 A lamp originally sold for PHP36 and is
marked down to sell for PHP30. Find the
markdown and rate of markdown.

PHP %

Original Selling
Price (S) PHP36 100%

-Markdown PHP6 ?
= New Price PHP30 ?
 Find the final selling price for a series of
markup and markdowns

 Each new price becomes the base.

 For markups based on cost, multiply the base by 1 +

the rate of markup.

 For markdowns, multiply the base by the complement

of the rate of markdown.
 Find the final selling price

Find the final price for an item that cost

PHP18, marked up by 20% and then, was
marked down 33%, and subsequently marked
up 10% and finally marked down by 50% for
clearance.
Answer: PHP7.91
 Find the selling price for a desired
profit on perishable and seasonal goods

 Determine the cost by multiplying the unit price by the

quantity.

 Determine the markup rate and amount and add to the cost.

 Establish the expected to sell amount.

 Divide the total selling price by the expected to sell amount.

 Find the per pound selling price

 Mr. Green buys 100 pounds of tomatoes at PHP.15 lb. and

establishes a markup rate of 120% based on cost. What is
the total cost?
 TC = PHP15 + MU=PHP18 =Total SP =PHP33
 He expects to sell 90%. How many pounds is he expected
to sell?
 Expected to sell = 90
 Divide the TSP by “expected to sell” number.
 SP = PHP0.37 lb. (rounded)