Business Mathematics | Mark Up and Mark Down

What do you know about the Cost Price (C)?

• The price of goods that we purchased from the manufacturer

• The price at which merchandise is offered for sale to the customer.

• Original price of the goods paid by the retailer to the manufacturer or supplier

• Amount of payment made by the retailer to the manufacturer after deducting trade and cash discount

What do you know about the Selling Price (SP)?

• The price at which merchandise is offered for sale to the customer

• Amount in Ringgit

• Original price of the goods paid by the retailer to the manufacturer or supplier

• Also known as retail price

What do you know about the Mark-Up (M)?

• The price at which merchandise is offered for sale to the customer

• Also known as gross profit and gross margin

• Original price of the goods paid by the retailer to the manufacturer or supplier

• Amount added to the cost in order to cover business expenses and generate profit

• The difference between the cost price and its selling price

What are the formula of Selling Price?

• Selling Price= Cost + Markup

• SP=C+M_sp for markup based on selling price

• SP=C+Mc for markup based on cost price

• SP=C+M

• SP=C+OE+NP

What do you know about MarkDown?

• The abbreviation is M

• The formula is to calculate the Markdown is, Markdown=Old Selling Price-New Selling Price

• The formula is to calculate the Markdown is, Markdown=New Selling Price-Old Selling Price

• Is the reduction in the selling price of merchandise due to many reasons such as to increase sales, to face stiff competition, to encourage purchase in bulk, to dispose old, damaged/obsolete stocks

• The abbreviation is MD

Net Profit _________

• is equal to gross profit

• can be calculated using formula, NP=M-OE

• is the reduction in the selling price of merchandise due to many reasons such as to increase sales, to face stiff competition, to encourage purchase in bulk, to dispose old, damaged/obsolete stocks

• is the amount (if any) which remains after the cost of goods and operating expenses have been paid.

What do you know about BEP?

• Breakeven Point

• the price at which merchandise is offered for sale just to cover the cost and the operating expenses

• means that it does not make any profit nor incur any loss

• Is the amount (if any) which remains after the cost of goods and operating expenses have been paid

• the additional amount of cost price and operating expenses

When the difference between New Selling Price and Breakeven Price is positive, we can say _______ is obtained.

• Loss

• Profit

When the difference between New Selling Price and Breakeven Price is negative, we can say _______ is obtained.

• Loss

• Profit

A computer is purchased for RM2500 with 20% of mark-up based on cost.

What is the value of RM2500 stand for?

• List Price

• Cash Price

• Cost Price