Markup and Markdown

Front

What is a markup?

Back

Markup is the amount added to the cost price of goods to cover overhead and profit. It is usually expressed as a percentage of the cost price.

Front

What is a markdown?

Back

Markdown is a reduction in the original selling price of a product. It is often used to encourage sales and clear out inventory.

Front

How do you calculate the sale price after a markdown?

Back

Sale Price = Original Price - (Original Price × Markdown Percentage)

Front

If an item is originally priced at $100 and is marked down by 20%, what is the sale price?

Back

Sale Price = $100 - ($100 × 0.20) = $80

Front

What is the formula to find the original price before a discount?

Back

Original Price = Sale Price / (1 - Discount Percentage)

Front

If a shirt costs $40 and is on sale for 30% off, what is the original price?

Back

Original Price = $40 / (1 - 0.30) = $57.14

Front

What is sales tax?

Back

Sales tax is a tax imposed by the government on the sale of goods and services, usually calculated as a percentage of the sale price.

Front

How do you calculate the total cost including sales tax?

Back

Total Cost = Price + (Price × Sales Tax Rate) or Total Cost = Price × (1 + Sales Tax Rate)

Front

If a product costs $50 and the sales tax is 5%, what is the total cost?

Back

Total Cost = $50 × (1 + 0.05) = $52.50

Front

What is the difference between markup and markdown?

Back

Markup increases the price of an item, while markdown decreases the price.