1. REVIEW  Return on Investment is a calculation that is used to determine the relative profitability of a product  Profit / Investment = Return on Investment  Break Even Point is the point at which sales revenue equals the costs and expenses of making and distributing.  Price sold at / Cost of making and marking = Break Even

2. PRICING MATH

3. BECAUSE EVERYONE TAKES TO LONG TO TAKE NOTES.  (P) – Price  (D)% - Discount Percent  (D)$ - Discount Dollars  (NP) – Net Price  (SP) – Sales Price  (C) - Cost  (MM)$ - Maintained Markup Dollar  (MM)% - Maintained Markup Percentage  (MD)$ - Markdown Dollar  (MD)% - Markdown Percentage  (MU)$ - Markup Dollar  (MU)% - Markup Percentage

4. PROFIT VS. MARKUP  Basic Markup Calculations  Cost (C) + Markup (MU) = Retail (RP)  Retail Price (RP) – Markup (MU) = Cost (C)  Retail price (RP) – Cost (C) = Markup (MU)

5. PERCENTAGE MARKUP  Determine the dollar markup  RP – C = MU$  Change the dollar markup to the percentage markup, divide it by the retail price. Result will be a decimal  MU$/RP = MU%  Change the decimal to a percentage .40 = 40%

6. MARKUP EQUIVALENT TABLE  On page 487

7. CALCULATIONS FOR LOWING PRICES  Markdowns – Reduce the quantity of goods in stock, a business will sometimes mark down merchandise by a certain percentage.  Retail Price (RP) x Markdown % = (MD)$  Retail Price (RP) – Markdown$ = Sales Price (SP)

8. CALCULATIONS FOR LOWING PRICES  Maintained Markup – Different between an item’s final sale price and its cost.  Retail Price (RP) – Markdown$ = Sales Price (SP)  Maintained Markup  SP – C = Maintained Markup (MM)$  Determine the maintained markup percentage  (MM) $ Divided by SP = (MM)%

9. DISCOUNTS  Discount is a reduction in the price of good and services sold to customers.  Multiply the price by the discount percentage to get the dollar amount of the discount  (P) x (D)% = (D)$  Subtract the discount from the price to get the net price  (P) – (D)$ = NP

10. DISCOUNTS  Cash Discounts is a discount offered to buyers to encourage them to pay their bills quickly  Determine the dollar discount  (P) x (D)% = (D)$  Determine the net price  (P) – (D)$ = (NP)