Markup, Cost and Selling Price

Cost

(C) the actual amount of $ you paid for the product. Add in the freight charges. C= C - C x %discount C = S-M C ÷ (M÷C) S ÷ SPF

Markup

(M)A dollar amount added to the cost of products to get the selling price. Also called Gross Profit , Markup Margin or Margin, Gross Margin Can be solved in the following ways: M = S-C S x (M÷S) C x (M÷C) OH + P (overhead plus profit)

Selling Price or Sales

(S) The amount of money you sell a product for S = C + M S ÷ (M÷S) C x SPF

Marking for Perishables

1. Determine the entire cost of the purchase (Cost per item x quantity bought = total cost) 2. Determine the total selling price of the entire purchase (use the markup on cost to get the SPF, multiply the SPF and the total cost = required sales) 3. Determine the amount of merchandise that is expected to sell (Amount to sell = Quantity Bought - Quantity Bought x percent to spoil/break/not sell) 4. Determine selling price: Required Sales ÷ Amount to sell

Marking for Perishables (full price and sale price)

1. Determine the entire cost of the purchase (Cost per item x quantity bought = total cost) 2. Determine the total selling price of the entire purchase (use the markup on cost to get the SPF, multiply the SPF and the total cost = required sales) 3. Determine the amount of merchandise that is expected to sell at regular price (Amount to sell at regular price = Quantity Bought - Quantity Bought x percent to sell at reduced price) 4. Determine the amount of merchandise that is expected to sell at reduced price (Amount to sell at reduced price = Quantity bought - Amount to sell at regular price) 5. Determine selling price: Required Sales = (Amount to sell at regular price x p) + (amount to selling at reduced price x reduced selling price solve for p

C

Cost

M

Markup, Margin, Gross Profit

Markup on Cost

M÷C

Markup on Sales

M÷S

S

Sale, Selling Price

SPF

Selling Price Factor M÷C + 1 1÷(1-M÷S)