Selling. Markup Based on Cost Cost The amount paid by a business to the manufacturer or supplier after trade discounts and other discounts have been.

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Presentation transcript:

Selling

Markup Based on Cost

Cost The amount paid by a business to the manufacturer or supplier after trade discounts and other discounts have been applied.

Selling Price The price at which merchandise is offered for sale to the public.

Markup AKA “Margin” or “Gross Profit” The difference between cost and selling price. That is, how much a business increases the price of an item when they sell it so that they can make a profit.

Formula Selling Price=Cost+Markup

Example 1 If a television costs a business $190 and they sell it for $300. What is the markup amount?

Example 1 If a television costs a business $190 and they sell it for $300. What is the markup amount? Answer: $110

Example 1 If a television costs a business $190 and they sell it for $300. What is the markup amount? Answer: $110 What percent of the cost is the markup amount?

Example 1 If a television costs a business $190 and they sell it for $300. What is the markup amount? Answer: $110 What percent of the cost is the markup amount? The markup amount is ___ % of the cost.

Example 1 If a television costs a business $190 and they sell it for $300. What is the markup amount? Answer: $110 What percent of the cost is the markup amount? The markup amount is 57.9 % of the cost.

Example 2 A school supply company sells scientific calculators for $15. The calculators cost the company $10 each. What is the markup amount and the markup percent on cost?

Example 2 A school supply company sells scientific calculators for $15. The calculators cost the company $10 each. What is the markup amount and the markup percent on cost? Markup Amount: $15 - $10 = $5

Example 2 A school supply company sells scientific calculators for $15. The calculators cost the company $10 each. What is the markup amount and the markup percent on cost? Markup Amount: $15 - $10 = $5 The markup amount is ____% of the cost.

Example 2 A school supply company sells scientific calculators for $15. The calculators cost the company $10 each. What is the markup amount and the markup percent on cost? Markup Amount: $15 - $10 = $5 The markup amount is ____% of the cost. $5 is ____% of $10.

Example 2 A school supply company sells scientific calculators for $15. The calculators cost the company $10 each. What is the markup amount and the markup percent on cost? Markup Amount: $15 - $10 = $5 The markup amount is ____% of the cost. $5 is ____% of $10. $5 is 50% of $10.

Operating Expenses AKA “Overhead” The expenses that come from operating a business such as: Wages and salaries for employees Rent for the building Utilities Insurance Advertising expenses

Revenue The amount of money a business makes by selling their products. Example: If lemonade sells for $0.50 per glass and Stacie sells 25 glasses of lemonade. Her revenue is $12.50

Net Profit

Examples to Turn In (Exit Slip) 1. Carlene sells candles at her store in Utah. Each candle costs her $8 and she sells them for $12. Find the markup percentage on cost. 2. Garrett sells staplers in Canton, Pennsylvania. The staplers cost him $3.50 each. He sells them at a 40% markup on cost. What is the selling price of his staplers?