2. SB-Lesson 12.1: Markup and Discount

3. Terminology Selling Price - The price retailers charge customers Cost - The price retailers pay to a manufacturer Markup, margin, or gross profit - The difference between the cost of bringing the goods into the store and the selling price Operating expenses or overhead - The regular expenses of doing business such as rent, wages, utilities, etc. Net profit or net income - The profit remaining after subtracting the cost of bringing the goods into the store and the operating expenses

4. Markup and Discount  Markup and Discount are like tax, commission, and tip questions.  You can… 1)Change the percent to a decimal and multiply. 2)Write a proportion like percent problems

5. Basic Selling Price Formula Selling price (S) = Cost (C) + Markup (M) $1,200 Computer $900 - Price paid to bring computer into store $300 - Dollars to cover expenses and profit

6. Markup vs. Discount  Markup A retail store buys items at wholesale prices. To cover expenses and make a profit, then sells items at higher retail prices. The extra amount is called the markup A retail store buys items at wholesale prices. To cover expenses and make a profit, then sells items at higher retail prices. The extra amount is called the markup.  Discount When an item is on sale, the store is selling the item for less, so this is called discount.

7. Markup  Finding the amount of markup.  A store buys a shirt at a wholesale price of $13.50 and sells the shirt for $24.95. How much was it marked up?  Finding the percent of markup.  What is the percent of markup for the shirt in the first problem? 24.95 -13.50 = $11.45 11.45/13.50=.848148148148148 = 84.8% or 85%

8. Markup 1) A store buys a pair of shoes at a wholesale price of $37.50 and sells them for $50. What is the amount of markup? 2) What is the percent of markup for the pair of shoes in problem 1? 3) Find the cost after markup: $15 movie, 20% markup

9. Discount  Find the amount of discount  A $36 book is on sale for $27. What is the amount of discount?  Find the percent of discount  What is the percent of discount for the book in the problem before? 36.00 – 27.00 = $9.00 9/36 = 0.25 = 25%

10. Discount 1)A $90 coat is on sale for $76.50. What is the amount of discount? 2)What is the percent of discount for the coat in problem 1? 3)Find the cost after discount: $85 radio, 10% discount.