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Chapter 4 - Mathematics of Merchandising 4.3 Markup (Gross Profit) - The Amount Added To The Cost of An Item To Get The Selling Price

This document contains sample problems from a college-level mathematics of merchandising chapter. It includes definitions of key terms like cost, selling price, markup, and rates of markup. There are 19 practice problems calculating various merchandising metrics like cost, markup amounts, and rates of markup on cost and selling price. The problems use examples of products like jeans, wine, hot dogs, and toasters to work through different markup scenarios.

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207 views4 pages

Chapter 4 - Mathematics of Merchandising 4.3 Markup (Gross Profit) - The Amount Added To The Cost of An Item To Get The Selling Price

This document contains sample problems from a college-level mathematics of merchandising chapter. It includes definitions of key terms like cost, selling price, markup, and rates of markup. There are 19 practice problems calculating various merchandising metrics like cost, markup amounts, and rates of markup on cost and selling price. The problems use examples of products like jeans, wine, hot dogs, and toasters to work through different markup scenarios.

Uploaded by

chantonius
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 4

Math 16269 – Week 1

Chapter 4 – Mathematics of Merchandising

4.3 Markup (Gross Profit) - the amount added to the cost of an item to get the selling price

S = Selling price (per item)


4-3 S=C+M C = Cost (per item)
M = Markup (per item)

M = Markup (per item)


4-4 M=E+P E = Overhead or operating Expenses (per item)
P = Operating Profit (per item)

4-5 S=C+E+P

“Real world” terminology:

Rate of markup on cost = M X 100% Rate of markup on selling price = M X 100%


C S

1 of 4
K. Vrhovnik
Math 16269 – Week 1

Text Questions

Page 144 - #3
C = $55.65 S = $79.50 E = 30% of selling price
Determine: a) The amount of markup
b) The amount of operating (overhead) expenses
c) The operating profit or loss
d) The rate of markup on cost
e) The rate of markup on selling price

a) $23.85 b) $23.85 c)$0 d) 42.86% e)30%

Page 144 - #9
C = ? S = $1990.00 M = $435.00 Rate of markup on cost = ? Rate of markup on selling price = ?
Find cost, rate of markup on cost, rate of markup on selling price.

a) $1,555 b) 27.97% c) 21.86%

2 of 4
K. Vrhovnik
Math 16269 – Week 1

Page 144 - #12


C = $6.60 M = ? S = ? Rate or markup on cost = ? Rate of markup on selling price = 40%
Find selling price, markup, and rate of markup on cost.

a) $11 b) $4.40 c) 66.67%

Page 144 - #13


Omega Restaurant buys Shiraz wine at $16.95 per bottle, and sells it to customers at $34.95 per bottle.
Calculate Omega’s rate of markup on cost and rate of markup on selling price of the wine.

a) 106.19% b) 51.5%

Page 144 - #16


The Annapolis Rotary Club sells hot dogs for $1.95 each at the annual Annapolis Fall Fair. The Rotary
Club buys wieners at $3.95 per package of 10 wieners, and hot dog buns at $2.90 per dozen. It costs
$78 for enough condiments for 1000 hot dogs. What are the Rotary Club’s rate of markup on selling
price and rate of markup on cost of the hot dogs?

a) 63.35% b) 172.85%
3 of 4
K. Vrhovnik
Math 16269 – Week 1

Page 145 - #18


Damsels clothing store orders a line of jeans at a suggested retail price of $58 less trade discounts of
30% and 7%. The manager intends to sell the jeans at the suggested retail price. If overhead expenses
are 25% of the selling price:
a) What will be the operating profit on each pair of jeans?
b) What is the rate of markup on cost?
c) What is the rate of markup on selling price?
d) What would be the break-even selling price for an inventory clearance sale?

a) $5.74 b)53.61% c) 34.9% d) $52.26

Page 145 - #19


The rate of markup on the cost of a toaster selling at $54.95 is 45%.
a) What was the cost of the toaster to the retailer?
b) What is the rate of markup on selling price?

a) $37.90 b) 31.03%

Homework: Page 144-145 (#1 – 19) odd numbers


4 of 4
K. Vrhovnik

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