BU362 Lecture 1: Markup vs Margin
Document Summary
Mark-up on cost vs margin yes, there is a difference. However, mark-up on selling price is the same as margin! Mark-up % (on cost) = 100% (calculated mark-up/ cost = 100%) whereas; Mark-up % (on selling price) or margin % = 50% (calculated mark-up/ selling price = 50%) Mark-up on cost % = selling price cost x 100. Margin % = selling price cost x 100. Note: rule of thumb" assume mark-up is based on sales (margin ) unless otherwise stated. One quick way to calculate a selling price (if margin% given) Margin % = ___mark-up_on_cost%___ (100+mark-up on cost %) Margin = _____100___ = 0. 5 = 50% (100 + 100) Margin = ___66_____ = 0. 3975 = 39. 8% (100+66) Mark-up on cost % = margin__ (1- margin) Margin = 50% , therefore mark-up on cost = 0. 5__ = 1 = 100% (1 - 0. 5)
