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    BUSINESS MATH Lesson 4 Week 5

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    Secret Deity
    The document defines key terms related to pricing such as selling price, cost of goods sold, markup, margin, and markdown. It provides formulas to calculate these values. For markup, the selling price equals cost plus markup, where markup is equal to the markup rate multiplied by cost. The markup rate can be found by dividing the markup by the cost. Similarly, for margin, the selling price equals cost plus margin, where margin is equal to the percentage margin multiplied by the selling price and the percentage margin is calculated by dividing the margin by the selling price.

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    © All Rights Reserved
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    BUSINESS MATH Lesson 4 Week 5

    Uploaded by

    Secret Deity
    3K views41 pages
    The document defines key terms related to pricing such as selling price, cost of goods sold, markup, margin, and markdown. It provides formulas to calculate these values. For markup, the selling price equals cost plus markup, where markup is equal to the markup rate multiplied by cost. The markup rate can be found by dividing the markup by the cost. Similarly, for margin, the selling price equals cost plus margin, where margin is equal to the percentage margin multiplied by the selling price and the percentage margin is calculated by dividing the margin by the selling price.

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    BUSINESS MATH Lesson 4 week 5

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    The document defines key terms related to pricing such as selling price, cost of goods sold, markup, margin, and markdown. It provides formulas to calculate these values. For markup, the selling price equals cost plus markup, where markup is equal to the markup rate multiplied by cost. The markup rate can be found by dividing the markup by the cost. Similarly, for margin, the selling price equals cost plus margin, where margin is equal to the percentage margin multiplied by the selling price and the percentage margin is calculated by dividing the margin by the selling price.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3K views41 pages

    BUSINESS MATH Lesson 4 Week 5

    Uploaded by

    Secret Deity
    The document defines key terms related to pricing such as selling price, cost of goods sold, markup, margin, and markdown. It provides formulas to calculate these values. For markup, the selling price equals cost plus markup, where markup is equal to the markup rate multiplied by cost. The markup rate can be found by dividing the markup by the cost. Similarly, for margin, the selling price equals cost plus margin, where margin is equal to the percentage margin multiplied by the selling price and the percentage margin is calculated by dividing the margin by the selling price.

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    You are on page 1of 41

    Selling Price

    the price at which a product or


    service is sold to the buyer.

    Cost of Goods Sold


    the original price of the merchandise
    paid by the retailer

    The retailer must add an additional amount to its cost to cover its
    business and to provide a profit.
    Markup
    the amount added to the
    cost price of goods to cover
    overhead and profit
    Thus,
    Markup
    is
    Selling
    Markup Cost
    Price
    Sell for:
    P 120
    Cost of Product:
    P 100

    Markup P 120.00 P 100.00


    • 
    If a business marks the price of a
    T-shirt bought for 100.00 to sell
    at 150.00. How much is the
    markup?

    P 50.00 P 150.00 P 100.00


    Markup can be expressed
    as a percentage of the
    cost of a product.

    𝑀𝑎𝑟𝑘𝑢𝑝=𝑀𝑎𝑟𝑘𝑢𝑝𝑟𝑎𝑡𝑒×𝐶𝑜𝑠𝑡
     
     
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=𝐶𝑜𝑠𝑡 + 𝑀𝑎𝑟𝑘𝑢𝑝
     
    𝑀𝑎𝑟𝑘𝑢𝑝=𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒 ×𝐶𝑜𝑠𝑡
     
    𝑀𝑎𝑟𝑘𝑢𝑝
    𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒=
    𝑐𝑜𝑠𝑡
    • 
    A dealer bought 15 crates of bananas at
    11, 250.00. if the dealer imposed a 40%
    markup based on the cost, find the:
    1.Cost per crate of the bananas; and
    2.Amount of markup per crate of
    bananas.
    Solution 1:
    • 

    Solution 2:
    Since 𝑀𝑎𝑟𝑘𝑢𝑝=𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒 ×𝐶𝑜𝑠𝑡
     

     
    𝑀𝑎𝑟𝑘𝑢𝑝= 0.40× ₱ 750.00
     
    𝑀𝑎𝑟𝑘𝑢𝑝=₱ 300.00
    • 
    A shop sells a laptop computer
    at 20,000.00. If each computer
    costs 16,500.00, what is the
    markup rate?
    Solution:
    • 
    Solution:
    Since
     
    𝑀𝑎𝑟𝑘𝑢𝑝= 𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒 × 𝐶𝑜𝑠𝑡
    Markup based on the selling price is called margin.
    Margin
    • the difference between selling price and the
    cost of goods sold.
     
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=𝐶𝑜𝑠𝑡 + 𝑀𝑎𝑟𝑔𝑖𝑛
     
    𝑀𝑎𝑟𝑔𝑖𝑛= 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − 𝐶𝑜𝑠𝑡
    • It is obtained by multiplying the selling price by the
    percentage margin.
     
    𝑀𝑎𝑟𝑔𝑖𝑛= 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛 × 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
     
    𝑀𝑎𝑟𝑔𝑖𝑛
    𝑃 𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛=
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=𝐶𝑜𝑠𝑡 +𝑀𝑎𝑟𝑔𝑖𝑛
     

    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=𝐶𝑜𝑠𝑡 + ( 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛 × 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 )


     

    𝐶𝑜𝑠𝑡 =𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − ( 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛 × 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 )


     

     
    𝐶𝑜𝑠𝑡 =𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ×(1 − 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛 )
      𝐶𝑜𝑠𝑡 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ×(1 − 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛)
    =
    (1− 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛) (1− 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛)
     
    𝐶𝑜𝑠𝑡
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=
    1 − 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛
    A home appliance retailer bought ten electric
    fans at ₱ 1, 050.00 each. He sold each unit
    with a 25% markup based on the selling price.
    Find the:
    1.Selling price for each electric fan, and
    2.Margin per electric fan
      𝐶𝑜𝑠𝑡
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=
    1 − 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛
      ₱ 1,050.00
    ¿
    1 − 0.25
     

    𝑀𝑎𝑟𝑔𝑖𝑛=𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 −𝐶𝑜𝑠𝑡


     

     
    • 
    A gift shop buys wallets for 300.00 and
    sells them for 350.00. Find the

    1.Percentage margin, and


    2.Markup rate
     

    𝑀𝑎𝑟𝑔𝑖𝑛=𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛 × 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒


     

      𝑀𝑎𝑟𝑔𝑖𝑛
    𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛=
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
      ₱ 50.00
    ¿  
    ¿ 0.1428 𝑜𝑟 14.28 %
    ₱ 350.00
    𝑀𝑎𝑟𝑘𝑢𝑝=𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒×𝐶𝑜𝑠𝑡
     

      𝑀𝑎𝑟𝑘𝑢𝑝
    𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒=
    𝐶𝑜𝑠𝑡
      ₱ 50.00
    ¿
    ₱ 300.00  
     
    ¿ 0.1667 𝑜𝑟 16.67 %
      𝐹𝑂𝑅𝑀𝑈𝐿𝐴𝑆

      𝑀𝑎𝑟𝑘𝑢𝑝 𝐹𝑜𝑟𝑚𝑢𝑙𝑎𝑠
     
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=𝐶𝑜𝑠𝑡 + 𝑀𝑎𝑟𝑘𝑢𝑝
    𝑀𝑎𝑟𝑘𝑢𝑝=𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒 ×𝐶𝑜𝑠𝑡
     

     
    𝑀𝑎𝑟𝑘𝑢𝑝
    𝑀𝑎𝑟𝑘𝑢𝑝 𝑟𝑎𝑡𝑒=
    𝑐𝑜𝑠𝑡
      𝑀𝑎𝑟 𝑔𝑖𝑛 𝐹𝑜𝑟𝑚𝑢𝑙𝑎𝑠
     
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=𝐶𝑜𝑠𝑡 + 𝑀𝑎𝑟𝑔𝑖𝑛
      𝑀𝑎𝑟𝑔𝑖𝑛
    𝑃 𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛=
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
     
    𝐶𝑜𝑠𝑡
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=
    1 − 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛
    • 

    A trading firm sells a laptop computer


    at 25,550.00. If each unit originally
    costs 19,300.00, compute the
    markup, the markup rate, and the
    percentage margin.
    Sheila bought a pair of rubber shoes
    costing ₱2,210.00 which she sells
    ₱3,845.40. Compute the margin and
    percentage margin per item.
    Why do
    businesses put
    items on sale?
    Markdown is a amount
    deducted on the selling
    price
    Original Selling
    Price
    The price at which the item is actually sold.

    Reduced Price
    The discounted price of an item from the regular
    selling price.
    Markdown Rate
    A percent of the original price
    Why do businesses put markdown?
    • To attract costumers to buy more products
    • To make the price appealing
    • To get rid of slow-moving merchandise
    • To increased sales
    • To meet the competitor’s prices
    How to compute for the markdown?
    Equation 1:
      𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛=𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − 𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑃𝑟𝑖𝑐𝑒
    Equation 2:
      𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛=𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒 × 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
    Equation 3:
      𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑃𝑟𝑖𝑐𝑒 =𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ×(1 − 𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒)
    • 
    A light-emitting diode (LED) lamp regularly
    priced at 1,948.00 is on sale for 1,499.00.
    Compute the

    1.markdown; and
    2.Markdown rate.
     
    𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛=𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − 𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑃𝑟𝑖𝑐𝑒
     
    ¿ ₱1,948.00 − ₱1,499.00
     
    ¿ ₱ 449.00
    𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛=𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒 × 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
     

      𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛
    𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒=
    𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒
     
    ₱449.00  
    ¿ ¿ 0.2305 𝑜𝑟 23.05 %
    ₱1,948.00
    During the clearance sake of a furniture shop,
    dining set originally priced at ₱ 42,000 was
    sold at a 40% markdown. What is the reduced
    price?
      𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑃𝑟𝑖𝑐𝑒 =𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ×(1 − 𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒)
     
    ¿ ₱ 42,000 × (1 − 0.40 )
     
    ¿ ₱ 25 , 200.00
    A fish vendor bought 100 kilograms of bangus
    at ₱66.00 per kilogram. He originally set the
    selling price to obtain a 40% margin. however.,
    to ensure that all will be sold, he gave a 15%
    markdown. Determine the
    1. Selling Price;
    2. Reduced Price; and
    3. Amount of markdown per kilogram.
      𝐶𝑜𝑠𝑡
    𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒=
    1 − 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑀𝑎𝑟𝑔𝑖𝑛
     
    ₱ 66.00
    ¿
    1− 0.40
     
    ¿ ₱ 110.00
    To compute the reduced price, we have
      𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑃𝑟𝑖𝑐𝑒 =𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 ×(1 − 𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛 𝑅𝑎𝑡𝑒)
      ¿ ₱ 110.00 × (1− 0.15)
     
    ¿ ₱ 93.50
     
    𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛=𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 − 𝑅𝑒𝑑𝑢𝑐𝑒𝑑 𝑃𝑟𝑖𝑐𝑒
    ¿ ₱1 10 .00− ₱ 93.50
     

     
    ¿ ₱ 16.50
    What are the markdown and the
    reduced price on an antique jar that
    has a regular price of ₱ 35,800 and is
    on sale for 26% off the regular price?
    A LED TV which was marked down at
    20% is on sale for ₱70, 265.00 Find
    the regular price.
    Sofia has some shirts in her boutique
    that have not sold. She decides to
    mark them down from ₱850 to
    ₱552.50, what percentage did she
    mark them down?

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