Can someone please explain mark-up? If selling price is $900 and cost price is $600..
Worked example please, thanks.
mark-up is calculated by using the mark up formula
mark up = (sales price / cost price) -1
like mq123 said, mark-up is basically the difference between the business' cost price and selling price. however, we cannot simply calculate it by deducting sales price from cost price.
EXAMPLE: if i sold a car at $47500 per unit, and purchased it from my supplier (the cost price) at $19000, what would my mark up be?
by using the mark up formula:
(sales price / cost price) -1
(47500/19000) -1
= 2.5-1
= 1.5 x 100 (the 'x 100' isnt part of the formula, but we cant leave our answer at 1.5)
= 150%
so if we followed the same procedure for your question,
(sales price / cost price) -1
= (900/600) -1
= 1.5 -1
= 0.5 x 100
= 50% mark up
hope that helps!