Download presentation

Presentation is loading. Please wait.

Published byVictoria Gordon Modified over 4 years ago

1
Selling Price In order to make money by selling a product, you need to sell it for more than it costs. How do you determine how much to charge for a product?

2
Lesson Objective Determine the net profit in dollars. Content Vocabulary operating expenses Also known as overhead, the costs of running a business, such as wages and salaries of employees, rent, utility charges, and taxes.

4
Sport Shop purchases water tubes for $44.98 each. It sells the tubes for $89.99 each. The owner estimates the overhead expenses to be 40 percent of the selling price of the merchandise. What is the net profit on each tube? Example 1

5
Find the markup. Selling Price – Cost $89.99 – $44.98 = $45.01 Example 1 Answer: Step 1

6
Find the overhead. Selling Price × Overhead Percent $89.99 × 40% = $35.996 or $36.00 Example 1 Answer: Step 2

7
Find the net profit. Markup – Overhead $45.01 – $36.00 = $9.01 Example 1 Answer: Step 3

8
Anamaries Shoppe buys chemises at a cost of $12.78. Anamaries sell the chemises at a selling price of $24.49. Its management estimates the overhead expenses to be 34 percent of the selling price of the merchandise. What is the net profit on each chemise sold? Example 2

9
Find the markup. Selling Price – Cost $24.49 – $12.78 = $11.71 Example 2 Answer: Step 1

10
Find the overhead. Selling Price × Overhead Percent $24.49 × 34% = $8.3266 or $8.33 Example 2 Answer: Step 2

11
Find the net profit. Markup – Overhead $11.71 – $8.33 = $3.38 Example 2 Answer: Step 2

12
Find the markup, overhead, and net profit. Selling price: $124.99 Cost: $71.59 Overhead: 40 percent of selling price Practice 1

13
Markup: $53.40 Overhead: $50.00 Net profit: $3.40 Practice 1 Answer

14
Find the markup, overhead, and net profit. Selling price: $189.50 Cost: $123.56 Overhead: 25 percent of selling price Practice 2

15
Markup: $65.94 Overhead: $47.38 Net profit: $18.56 Practice 2 Answer

Similar presentations

OK

Why Businesses Use Markup? Why the markup? ◦ Cover businesses operating expenses ◦ Cover Business Taxes ◦ Make a profit.

Why Businesses Use Markup? Why the markup? ◦ Cover businesses operating expenses ◦ Cover Business Taxes ◦ Make a profit.

© 2018 SlidePlayer.com Inc.

All rights reserved.

To make this website work, we log user data and share it with processors. To use this website, you must agree to our Privacy Policy, including cookie policy.

Ads by Google