Chapter 8: Markup Definitions, examples, etc. taken from Contemporary Business Mathematics for Colleges, 14th Edition by Deitz & Southam, Thomson Southwestern Publisher.

Key Terms / Items Markup: increase “tacked onto” a product above what it cost the seller. It can be expressed as a dollar markup or a percent markup. Cost of Goods Sold – total cost of all goods sold during an accounting period (purchase price, freight, etc.).

Key Terms / Items (continued) Selling price = Cost + Dollar markup Dollar markup = Selling price – Cost Cost = Selling price – Dollar markup Markup Percent (also known as markup rate): percent used to markup various items To compute the selling price based upon cost: 1. Multiply the cost by the markup percent to get the dollar markup. 2. Add the dollar markup to the cost to get the selling price.

Key Terms / Items (continued) To compute the selling price directly from the cost: 1. Add 100% to the markup percent. 2. Multiply this sum by the cost to get the selling price. To compute the cost from the markup percent: 1. Add 100% to the markup percent. 2. Divide the selling price by this sum to get the cost.

Key Terms / Items (continued) To compute the markup percent based on cost: 1. Subtract the cost from the selling price to get the dollar markup. 2. Divide the dollar markup by the cost to get the markup percent. To compute the dollar markup AND cost from the markup percent: 1. Multiply the selling price by the markup percent to get the dollar markup. 2. Subtract the dollar markup from the selling price to get the cost.

Key Terms / Items (continued) To compute the cost from the markup percent and selling price: 1. Subtract the markup percent from 100%. 2. Multiply this difference by the selling price to get the cost. To compute selling price from the cost: 1. Subtract the markup percent from 100%. 2. Divide the cost by this difference to get the selling price.

Key Terms / Items (continued) To compute the markup percent from the selling price: 1. Subtract the cost from the selling price to get the dollar markup. 2. Divide the dollar markup by the selling price to get the markup percent.