11

Business
Mathematics
Quarter 1 – Module 4:
Mark-up, Mark-on and
Mark-down
Business Math – Grade 11
Self-Learning Module (SLM)
Quarter 1 – Module 4: Mark-up, Mark-on and Mark-down
First Edition, 2020

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Introductory Message

This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions,
directions, exercises, and discussions are carefully stated for you to
understand each lesson.

Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.

Pre-test are provided to measure your prior knowledge on lessons in each

SLM. This will tell you if you need to proceed on completing this module, or if
you need to ask your facilitator or your teacher’s assistance for better
understanding of the lesson. At the end of each module, you need to answer
the post-test to self-check your learning. Answer keys are provided for each
activity and test. We trust that you will be honest in using these.

In addition to the material in the main text, Notes to the Teachers are also
provided to the facilitators and parents for strategies and reminders on how
they can best help you on your home-based learning.

Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and
tests. Read the instructions carefully before performing each task.

If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.

Thank you.
 What I Need to Know

This module was designed and written with you in mind. It is here to help you
master the topic on mark-on, mark-down and mark-up. The scope of this module
permits it to be used in many different learning situations. The language used
recognizes the diverse vocabulary level of students. The lessons are arranged to
follow the standard sequence of the course. But the order in which you read them
can be changed to correspond with the textbook you are now using.

In this module, you will be able to:

• differentiate mark on, mark down and mark up; and
- - -

ABM_BM11BS-Ig-1
• obtain mark on, mark down and mark up given the price of a product.
- - -

Specifically, you are expected to:

1. define mark up, mark on and mark down;
- - -

2. differentiate mark up, mark on and mark down; and

- - -

3. solve problems involving mark on, mark down and mark up given the
- - -

price of a product.

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 What I Know

Before we begin this lesson, let us find out how much you already know on
this module. After taking and checking this short test, take note of the items that
you were not able to answer correctly and look for the right answer as you go
through this module.
Direction: Encircle the letter of the correct answer.
1. Which of the following refers to the sum of all the operating expenses and
profit?
a. mark-on
b. margin
c. mark-up
d. mark down
-

2. A product originaly costs ₱ 50 and is now sold at ₱100. How many percent is
the profit?
a. 25%
b. 50%
c. 75%
d. 100%
3. What is the sum of the mark up and the cost price?
-

a. cost
b. loss
c. profit
d. selling price
4. What do we call the additional increase in the price of a product during peak
season?
a. m ark on -

b. m ark up -

c. margin
d. m ark down -

5. When should you NOT impose mark on on your product?

-

a. During Christmas Holiday

b. When a calamity has recently hit the area
c. When you need to sold out all your products
d. When there is a limited supply for raw materials
6. Which of the following mathematical equations can we use to solve for the
mark-on?
a. MO = MU + S
b. MO = S MU –

c. MO = NP – S
d. MO = S NP –

7. Traders often lower their prices to get rid of “poor-sale” products. What do we
call this price reduction?
a. mark on
-

b. margin
c. mark up
-

d. mark-down

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 8. Which among the following situations does NOT encourage businessmen to
impose mark-down on their products?
a. Seasonal demands
b. Poor sales of a product
-

c. The item is perishable and it needs to be disposed

d. Competition against other sellers of the same product
9. What do we call a mark-down on a product that sometimes results to a
negative profit?
a. cost
b. loss
c. profit
d. selling price
10. Which of the following statements is true?
a. Mark-on is the reduction of price on a product.
b. Mark down is the decrease of price on a product.
-

c. Mark-up is the increase of price on peak seasons.

d. Mar k-up results to a negative profit in the business.
-

11. Micah has a milktea shop that sells milktea for ₱85 for the regular-sized cup.
However, she is not earning enough to cover the expenses and thus results
to zero profit. What should she impose on her product to address this
problem and since Milktea Festival is coming? Why?
a. Mark-on, she can increase the price anytime she wants.
b. Mark-on, she can take advantage of the Festival to earn more.
c. Mark down, she can decrease the price and it will all be sold out.
-

d. Mark down, she can sell more if her products are affordable.
-

12. Which of the following statements is ALWAYS true?

a. Mark on should be large enough to earn bigger.
-

b. Mark-down should be large enough to gain profit.

c. Mark-up should be equal to the sum of all the expenses.
d. Mark up should be sizable enough to cover the expenses.
-

13. What is the selling price of a t-shirt that costs ₱ 120 with a mark-up rate of
50%?
a. ₱150.00
b. ₱125.00
c. ₱160.00
d. ₱180.00
14. Bev brought a bracelet for only ₱48 which was regularly priced at ₱60. What
is the mark down rate of the bracelet?
-

a. 12%
b. 20%
c. 48%
d. 52%
15. On All Soul’s Day, Tris sells candles for ₱35 per pack. But on a regular day,
she sells them at ₱20 per pack. How much is the mark-on she imposed?
a. ₱10.00
b. ₱15.00
c. ₱35.00
d. ₱55.00

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 Hello there, business enthusiasts! Setting price on a product is also one of the
most exhausting tasks in starting a business since you have to consider a lot of
things. However, throughout this module, not only you will learn how but you will
also have fun setting the price right.

What’s In

In the previous modules, you have learned how to simplify fractions by

performing the fundamental operations, to solve problems with its practical
applications and to express fractions and decimals to percent and vice-versa. Now,
let us review your knowledge in computing the base, rate and portion.

We have learned that base refers to the number that represents a whole or
100%. It is usually preceded by the word “of”. Rate refers to that number which
represents a percent of another number. It can be expressed as decimal, fraction
and percent. Portion refers to that number that represents part of a whole. It is
usually preceded by the word “is”.

When we compute for the portion, we use the formula P = BR. To be able to
easily memorize the formula, we use the illustration shown below.

Example:

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Let’s have the following examples!

A. Identifying the base, rate and portion.

Given Problem Base Rate Portion

1. 50% of 400 is 200. 400 50% 200

2. 50 is 20% of 250. 250 20% 50

3. 23% of ₱365.00 is ₱83.95 ₱365.00 23% ₱83.95

B. Identifying the given and solving for the unknown.

1. 12 is what part of 40?

B = 40
Given:
P = 12

Formula: R= P
B

R= P
B
12
Solution: R=
40
R = 0.3 x 100%
R = 30%

2. 28 is 70% of what number?

R = 70% = 0.70
Given:
P = 28

Formula: B = P
R

B= P
R
Solution: B = 28
0.70
B = 40

3. 60% of 320 is what number?

R = 60% = 0.60
Given:
B = 320

Formula: P = BR

P = (320)(60)
Solution:
P = 180

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C. Analyzing the following problems carefully and solving for what is asked.

1. On her 18th birthday, Sara received ₱5,000 from her Ninang Nena.
She used 12% of the money to buy books she needed in school. How
much did she spend?

B = ₱5,000
Given: R = 12% = 0.12 Formula: P = BR

P = (₱5,000)(0.12)
Solution:
P = ₱600

Sara spent ₱600 for her books which is 35% of

Conclusion:
₱5,000.

2. There are 462 boys currently enrolled in Grade 11 in a certain

school. This represents 35% of the total population of the Grade 11
students. How many Grade 11 students are enrolled in this school?

P = 462
Given: R = 35% = 0.35 Formula: B= P
R

B= P
R
Solution: 462
B=
0.35
B = 1, 320

Conclusion: There are 1,320 students currently enrolled.

3. Deemps earned ₱8,000 from her online selling. She made sure that
₱2,500 will be saved for her projects in school. How many percent of
her earnings did she save?

P = ₱2,500 P
Given: B = ₱8,000 Formula: R=
B
P
R=
B
₱2,500
Solution: R = ₱8,000
R = 0.3125 X 100%
R = 31.25%
Deemps was able to save 31.25% of her
Conclusion:
earnings from online selling.

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 What’s New

Throughout the module, you will be doing fun activities that will challenge
and enhance your knowledge and skills in buying and selling. Let’s begin!

Activity 1. Income Up, Income Down

Direction: Analyze if the following situations illustrate an increase or decrease in

income. If the problem illustrates an increase in income, draw a heart
in the column with a happy face. If the problem illustrates a decrease in
income, draw a heart in the column with a sad face. After identifying,
write the amount of increase or decrease. The first number is done for
you.

Situation Amount

1. Sai bought two jackets for ₱750 each. She decided

to sell both the jackets to her friend with a selling ₱300
price of ₱1800.

2. Leah ordered pouches at Shopey worth ₱25 each.

She sold them at ₱38 each.

3. Kesese Mall decided to sell their last televison set

worth ₱10,800 which originally costs ₱17,500.

4. Eggs originally cost ₱5.50 each in the supermarket.

Aling Nena sold it for ₱9 each in her sari-sari store.

5. Christmas season is coming and Gio noticed that

the selling price of the Christmas lights this week is
now ₱78. Last week, it was only worth ₱55.

6. Gilbert decided to sell his mango for ₱85 per pack

so he can already go home. Earlier that day, his
mango costs ₱120 per pack.

After answering the activity, you will realize that there are certain situations
where your income may increase or decrease. These instances will depend upon
certain events such as high or low demand for a product, items are perishable and
it needs to be disposed, competition against other stores of the same product, and
even peak seasons like Christmas.

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 What is It

Let us try to understand some of the terms which we will encounter

throughout the module.

Cost Price is the price that a company or store has to pay for the goods it is going
to sell or the price that has to be spent to produce goods or services before
any profit is added. Baking ingredients for cookies and raw materials in
creating bracelets are some examples that comprise the cost price.

Operating Cost is the price spent relative to the production and sale of commodity.
For example, the operating cost in selling cookies would be the fare in buying
the ingredients, the rent for the store, the packaging, and the bills.

Profit is the money earned after the cost price and the operating costs accounted
for after the sale of a commodity. It is the difference between the selling price
and the sum of all the total costs (cost price and operating cost).

Selling Price is the price in which the commodity or good is sold per unit. To
compute for the selling price, we use

SELLING PRICE = Cost Price + Operating Expenses + Profit

𝑺 = 𝑪 + 𝑬 + 𝑷

Where, S = Selling Price

C = Cost Price
E = Operating Expenses
P = Profit

In order for you to come up with a selling price, you have to account all the
other expenses and the profit you want to gain. If the selling price is too high, the
customers may not be able to afford it. On the other hand, if the selling price is too
low, the company may not gain profit.

Now let us discover and understand deeper the key concepts of buying and
selling.

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I. Mark – up

It is the difference between the selling price (S) and the cost price (C), and is
sometimes referred to as the margin or gross profit. It can also be defined as the
sum of all expenses (E) and profit (P).

(i) Mark – up = Operating Expenses + Profit

𝑀𝑈 = 𝐸 + 𝑃
(ii) Mark – up = Selling Price - Cost

𝑀𝑈 = 𝑆 – 𝐶

Study the following examples!

Sara would like to resell bags she bought from an online shop which costs
₱100 each. If the operating expenses was 12% of the cost and she wanted to have a
profit that is 18% of the cost:

1) How much should be her mark – up?

Cost = ₱100
Given: Expenses = 12% of ₱100
Profit = 18% of ₱100

MU = E + P
MU = (12% x ₱100) + (18% x ₱100)
Solution:
MU = ₱12 + ₱18
MU = ₱ 30

Conclusion: The mark – up price is ₱30 for each bag.

2) How much is the selling price?

Cost = ₱100
Given: Expenses = 12% of ₱100
Profit = 18% of ₱100

S = C + MU
Solution: S = ₱100 + ₱30
S = ₱130

Conclusion: Sara should sell the bag at ₱130 each.

When we want to compute for the rate of mark-up, we can either base the rate
on the cost or on the selling price.

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 A. Mark-up Rate Based on Cost

Mark-up is based on cost if the cost is taken as the base to express the
mark-up in terms of percent. The formula for the rate of mark-up based on
cost, denoted by 𝑀𝐶, is given by:

Mark-up
MC =
Cost

MU
MC =
C

Using what you have learned in the previous modules, we can illustrate
this as:

Study the following examples!

1. A jacket that costs ₱2,150 is being sold at ₱3,150. What is the rate of mark-
up based on cost?

Cost = ₱2,150
Given:
Selling Price = ₱3,150

First, let us solve for the mark-up.

MU = S – C
MU = ₱3,150 – ₱2,150
MU = ₱1,000

Now, let us solve for rate of mark-up based on

Solution: cost.
MU
MC=
C
₱1,000
MC =
₱2,150
MC= 0.4651 x 100%
MC=46.51%

The jacket has a 46.51% mark-up based on

Conclusion:
cost.

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2. Jim decided to resell gym shorts which costs ₱350 at an online store. He
wanted to have a 15% mark-up based on cost. Solve for the mark-up and
the selling price.

Cost = ₱350
Given:
MC = 15% = 0.15

Since MC= MU We have,

C
.
MU = MC x C
MU = 0.15 x ₱350
MU = ₱52.50
Solution:
The mark-up for the gym shorts is ₱52.50.
S = C + MU
S = ₱350 + ₱52.50
S = ₱402.50

The selling price of the gym shorts is ₱402.50

Conclusion:
which includes the mark-up of ₱52.50.

B. Mark-up Based on Selling Price

Mark-up is based on selling price if the selling price is taken as the base
to express the mark-up in terms of percent. This is also called as the margin
or gross margin which is sales minus the cost of goods sold. The formula for
the rate of mark-up based on selling price, denoted by 𝑀𝑆, is given by:

Mark-up
MS =
Selling Price
MU
MS=
S

Using what you have learned in the previous modules, we can illustrate
this as:

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Study the following examples!

1. A fruit blender that costs ₱750 is being sold at ₱900. What is the rate of
mark-up based on selling price?

Cost = ₱750
Given:
Selling Price = ₱900

First, let us solve for the mark-up.

MU = S – C
MU = ₱900 – ₱750
MU = ₱150
Now, let us solve for rate of mark-up based on
Solution: cost.
MU
MS=
S
₱150
MS =
₱900
MS= 0.1667 x 100%
MS=16.67%

The fruit blender has a 16.67% mark-up based

Conclusion:
on selling price.

2. Shylla’s drawing costs ₱450 and she decided to sell it with 30% mark-up
based on the selling price. Solve for the mark-up and the selling price.

Cost = ₱450
Given:
MS = 30% = 0.30
MU
Since M = We have,
S
S
.
MU = MS x S
MU = 30% x ₱450
MU =₱135
Solution: The mark-up based on the selling price for the
drawing is ₱135.
S = C + MU
S = ₱450 + ₱135
S = ₱585

The selling price of the drawing is ₱585 which

Conclusion:
includes the mark-up of ₱135.

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II. Mark – on

At peak seasons such as Christmas Holidays and Valentine’s Day, some

businesses take advantage of these times by increasing the prices that are already
charged on their products. At some instances, a calamity that has recently hit an
area can also affect the price increase of some commodity as the supplies become
limited. This price increase is what we call mark – on.

In order to compute for the mark – on, we are going to use the formula below:

Mark – on = New Selling Price – Selling Price

𝑀𝑂 = 𝑁𝑃 – 𝑆
Study the following examples!

1. Alucard is selling banana cue at the price of ₱12 per stick on a regular day.
However, because of the recent storm, the supply of banana becomes
limited. Due to a higher demand and limited supply, Alucard decided to sell
his banana cue at ₱18. How much was the mark – on imposed?

Selling Price = ₱12

Given:
New Selling Price = ₱18
MO = NP – S
Solution: MO = ₱18 – ₱12
MO = ₱6
The mark – on of the banana cue amounts to
Conclusion:
₱6.

2. Aling Pacing is selling roses at her stall. Because Valentine’s season is

coming, there is a higher demand for this kind of flower. She decided to
increase her price by ₱15. If the cost of a bouquet of roses is ₱120 with a
20% mark – up, what is the selling price of the roses? How much would be
the new selling price with the mark – on ₱15?

Mark-on = ₱15
Given: Cost = ₱120
Mark-up Rate = 20% = 0.20
(i) First, let us solve for the mark -up.
MU = 20% x ₱120
MU = 0.20 x ₱120
MU = ₱24
Solution:
Then, we will solve for the selling price of the
roses.
S = C + MU
S = ₱120 + ₱24

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 S = ₱144
The selling price of the roses will be ₱144.

(ii) Since MO = NP – S, we have

NP = S + MO
NP = ₱144 + ₱15
NP = ₱159
Aling Pacing will sell the roses for ₱159 as its
Conclusion:
new selling price.

III. Mark – down

Sometimes, to be able to stand against competitors in the market, sellers tend

to lower the prices of their goods. For example, you decided to lower the price of
your cookie from ₱10 (original price) to ₱8 (selling price), the ₱2 reduction in the
selling price is called the mark -down. However, imposing mark – down may result
to zero profit.

A mark – down may either be temporarily or permanently. A temporary

mark – down is a reduction in the selling price of an item to encourage consumers
to increase their demand on a particular product. On the other hand, a permanent
mark – down is implemented by companies to remove a “poor-sale” product from
their inventory. In general, the purpose of markdown is either to generate sales or
to clear inventory.

In order to compute for the mark – down and the mark – down rate, we are
going to use the following formula:

Mark – down = Original Price – Selling Price

Note:
𝑀𝐷 = 𝑂𝑃 – 𝑆
Mark - down Multiply the answer by
Mark-down Rate =
Original Price 100% since it will be
expressed as a percent.
MD
MD =
OP

Study the following examples!

1. Mr. Dap was able to buy a cellphone at ₱11,500 which was originally sold at
the price of ₱13,700. How much was the mark – down of the cellphone?
Compute for the mark – down rate.

OP = ₱13,700
Given:
S = ₱11,500

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 MD = OP – S
MD = ₱13,700 – ₱11,500
MD = ₱2,200
The mark – down of the cellphone is ₱2,200.
Solution: MD
MD =
OP
₱2,200
MD =
₱13,700
MD = 0.1606 x 100%
MD = 16.06%
The mark – down rate of the price of the
Conclusion:
cellphone is 16.06%.

2. Carol wanted all her perfume products be sold out and decided to lower her
price to a 15% mark – down from the original price of ₱220. How much is her
mark – down? What will be her selling price?

MD = 15% = 0.15
Given:
OP = ₱220
Since MD= MD . We have,
OP
MD= MD x OP
MD=15% x ₱220
MD= ₱33
The mark-down amount of the perfume
Solution: products will be ₱33.

Since MD = OP – S,
We have,
S = OP – MD
S = ₱220 – ₱33
S = ₱187
The selling price of the perfume now will be
Conclusion:
₱187.

What’s More

Now, to allow you to understand deeper the lessons that we have discussed in
this module, let us have the following activities.

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