Buying and Selling What is Mark-up?

: the difference between the selling price

and the cost price sometimes referred to as Margin
INTRODUCTION
or Gross Profit.
This module focuses on the computation of
mark-up, mark-down, and margin percentages based
on stated conditions. ➢ How to compute for the Mark-up?
𝑴𝑼 = 𝑺 − 𝑪
LEARNING OUTCOME: At the end of the module,
you shall be able to: Examples:
• Compute for the mark-up, mark-on, mark- 1. Aling Ana would like to sell little trinkets she
down, and margin percentages of given purchased from Divisoria for Php 12 each. If
commodities or services based on stated the operating cost is set at 25% of the cost
conditions. price and she would like to have a 15% profit
on the cost of raw materials necessary to
LEARNING OBJECTIVE: produce the item being produced for sale.
• Determine the selling price, sale price or
a. Determine the mark-up price for
peak price of an item giving existing
each trinket.
conditions.

b. Help Aling Ana determine the selling

❖ What’s Inside?
price for each trinket.

What is Cost price? Solution:

: the price (per unit) that a company or store
ha s to pay for the goods. a. 𝑀𝑈 = 𝐸 + 𝑃 = (0.25 × 12) +
(0.15 × 12) = 3 + 1.90 =
What is Operating Cost? 𝑷𝒉𝒑 𝟒. 𝟖𝟎.
: the price (per unit) incurred relative to the
production and sale of a commodity. b. 𝑆 = 𝐶 + 𝑀𝑈 = 12 + 4.80 =
𝑷𝒉𝒑 𝟏𝟔. 𝟖𝟎.
What is Selling Price?
: the price at which the commodity is sold 2. A jacket which costs Php 1350 is being sold
per unit. at Php 2025. What is the rate of mark-up
based on cost?
What is Profit?
: money earned after the cost price and Solution:
operating costs are accounted for after the sale of a
2025−1350
commodity. 𝑅𝑎𝑡𝑒 𝑜𝑓 𝑀𝑈 = 1350
= 0.5 = 𝟓𝟎%.

➢ How to compute for the Selling 3. Julia buys a notebook with a cost of Php 45.
Price? The rate of mark-up based on cost is 25%.
𝑺=𝑪+𝑬+𝑷 Find the selling price and the mark-up.
where S is Selling Price, C is Cost Price, E is
Operating cost, and P stands for Profit. Solution:

𝑀𝑈 = 0.25 ∗ 45 = 𝑷𝒉𝒑 𝟏𝟏. 𝟐𝟓.

𝑆 = 45 + 11.25 = 𝑷𝒉𝒑 𝟓𝟔. 𝟐𝟓.
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 4. Peter decides to impose a mark-up of Php 5 price of galunggong by Php 10 per kilo. If the
on each pen he sells to his classmates and cost of galunggong is Php 90 per kilo with a
friends. This represents a 20% mark-up 35% mark-up, what is its new selling price
based on the selling price. Find the cost and with the additional increase of Php 10? By
the selling price of the pens Peter sells. how much is the rate of mark-up based on
cost increased by adding Php 10 to the
Solution: regular selling price of the galunggong?

100& − 30% = 70% (𝐶𝑜𝑠𝑡 𝑜𝑓 𝑡𝑜𝑝) Solution:

𝐶 = 0.70𝑆
280 = 0.70𝑆 𝑀𝑈 = 0.35𝑆 = 0.35 = 31.50.
𝑆 = 𝑷𝒉𝒑 𝟒𝟎𝟎. 𝑆 = 𝐶 + 𝑀𝑈 = 90 + 31.50 = 121.50.
Combined Rate of Mark-up and Mark-on=
𝑀𝑈 = 𝑆 − 𝐶 31.50+10
= 0.4611 = 46.11%.
𝑀𝑈 = 400 − 280 = 90
= 46.11.35 = 11.11%.
𝑷𝒉𝒑 𝟏𝟐𝟎.

The mark-up is increased by 11.11% by the

5. Find the cost and mark-up of a box of pencils
additional mark-on of Php 10 imposed by
being sold for Php 135 with a 25% mark-up
Manang Crising.
based on selling price.

2. Kenn Angelo’s Flower Shop imposes a 45%

Solution:
mark-up on flowers delivered to them for
sale. During All Saint’s Day, however, an
𝑀𝑈 = 0.25𝑆 = 0.25 ∗ 135 = 𝑷𝒉𝒑 𝟑𝟑. 𝟕𝟓.
additional mark-on of 25% of the regular
𝐶 = 𝑆 − 𝑀𝑈 = 135 − 33.75 =
selling price is added on. Determine the unit
𝑷𝒉𝒑 𝟏𝟎𝟏. 𝟐𝟓.
price of 300 roses worth Php 15000
delivered to Kenn Angelo’s Flower Shop
❖ What’s Inside?
during All Saint’s Day. How much is the
Now pretend that during the actual food selling price of each rose during All Saint’s
sale, your group realizes that there is such a high Day at this flower shop?
demand for banana cue and that buyers can easily
afford the selling price you have pegged. Some Solution:
businesses will want to take advantage of this peak
15000
season and thus, increase the prices already pegged 𝑈𝑁𝐼𝑇 𝑃𝑅𝐼𝐶𝐸 = = 50
for their commodities. This is what we call the 300
𝑀𝑈 = 0.45𝐶 = 0.45 ∗ 50 = 22.50
MARK-ON.
𝑆 = 𝐶 + 𝑀𝑈 = 50 + 22.50 = 72.50
𝑀𝑂 = 0.25𝑆 = 0.25 ∗ 72.50 = 18.13
➢ How to compute for the Mark-on? 𝑃𝑆 = 𝑆 + 𝑀𝑂 = 72.50 + 18.15 = 90.65.
𝑀𝐴𝑅𝐾 − 𝑂𝑁 = 𝑃𝐸𝐴𝐾 𝑆𝐸𝐿𝐿𝐼𝑁𝐺 𝑃𝑅𝐼𝐶𝐸
− 𝑅𝐸𝐺𝑈𝐿𝐴𝑅 𝑆𝐸𝐿𝐿𝐼𝑁𝐺 Each rose sells for Php 90.65 at Kenn
𝑴𝑶 = 𝑷𝑺 − 𝑺 Angelo’s Flower Shop during All Saint’s Day.

Examples: 3. Find the regular selling price and the cost

1. Manang Crising observes that market goers price of memorabilia items being sold for
prefer to buy fish from her because there is Php 500 if the mark-up is set at a rate of 25%
an undersupply of meat in the market this of the cost price with an approved 15%
season. She then decides to increase the
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 mark-on rate based on the cost price PRICE. In this case, the selling price is simply equal to
included because of a special event. the total of the cost price and the operating
expenses:
Solution: 𝑩𝑬𝑷 = 𝑪 + 𝑬.
𝑃𝑆 = 𝐶 + 𝑀𝑈 + 𝑀𝑂
= 𝐶 + 0.25𝐶 + 0.15𝐶 Examples:
500 = 1.40𝐶 1. Carlo was able to buy a pair of shoes
𝐶 = 357.15 (𝐶𝑂𝑆𝑇 𝑃𝑅𝐼𝐶𝐸) regularly priced at Php 3500 for only Php
2100.
𝑀𝑈 = 0.25𝐶 = 0.25 ∗ 357.15 = 89.29
𝑆 = 𝐶 + 𝑀𝑈 = 357.14 + 89.29 = 446.43. a. What was the amount of the mark-
down?
The regular selling price of the memorabilia
item is Php 446.43. b. What was the rate of the mark-down?

❖ What’s Inside? Solution:

This time, consider that the sale of your 𝑀𝐷 = 𝑆 − 𝑆𝑃

banana cue is coming in slow. You may need = 3500 − 2100
to sell it at a discounted price or what is = 1400
commonly known as the SALE PRICE. 𝑀𝐷
𝑀𝐷% = ∗ 100%
𝑆
1400
= ∗ 100%
3500
= 40%.
What is Mark-down?
: the difference between the REGULAR
2. During a Midnight Madness Sale, a board
SELLING PRICE and the SALE PRICE.
game regularly priced at Php 8500 was sold
at 55% discount. The cost of the board game
➢ How to compute for the Mark-
is Php 3450 and expenses are 14% of the
down? regular selling price.
𝑀𝐷 = 𝑆𝐸𝐿𝐿𝐼𝑁𝐺 𝑃𝑅𝐼𝐶𝐸 − 𝑆𝐴𝐿𝐸 𝑃𝑅𝐼𝐶𝐸
𝑴𝑫 = 𝑺 − 𝑺𝑷 a. What was the amount of the mark-
down?
Mark-downs commonly happen when the mall
decides to sell their items at cut down prices to clear b. What was the rate of the mark-down?
their warehouse collection. For instance, some items
which usually sold for Php 150 are sold at 50% off Solution:
during mall sales and so the mark-down price is set
at Php 75. a. 100% − 55% = 45%
𝑆𝑃 = 0.45𝑆
Note that it is possible that instead of making the = 0.45 ∗ 8500
business owner earn a positive profit, selling an item = 3825
on sale sometimes gives rise to a negative profit. In
this case, the profit is said to be a LOSS. b. 𝐶𝑇𝑂𝑇𝐴𝐿 = 𝐶 + 𝐸
= 3450 + (0.14 ∗ 8500)
When an item is given a selling price where the profit = 4640
ends up being zero, this is said to be the BREAK-EVEN 𝑃 = 𝑆𝑃 − 𝐶𝑇𝑂𝑇𝐴𝐿

3
 = 3825 − 4640 e. If the TV set is sold at Php 7500, how
= −815 (𝐿𝑂𝑆𝑆). much profit or loss is incurred by
Appliance store?
▪ ASSESSMENT
4. A patio table set that costs a dealer Php 25000
less 45%, 25% is marked-up 160% based on cost.
General Directions: For a quick sale, it is sold at a mark-down rate of
o Use black ink ONLY. 35%.
o Use any bond paper bearing your complete
name and section/year level ONLY.
a. What is the regular selling price?
o Show your solution.

1. I am waiting for a pair of sunglasses currently b. What was the sale price?
priced at a sale price of Php 875. What rate of
mark-down will be necessary for this to happen? c. What was the rate of mark-up based on
cost realized during the sale?
2. The Cellphone Company buys iPhones at Php
24000. Expenses are set at 17% of the selling 5. A stall in Divisoria bought 225 blouses at Php
price and the required profit is set at 20% of the 15750. 25 of these blouses were sold at a mark-
selling price. During weekend sale, the iPhone is up of 150% based on cost, 175 pieces were sold
sold at 10% discount. at a mark of 75% of the cost, 10 pieces were sold
during a clearance sale at Php 80 each and the
a. What is the regular selling price of the remaining blouses were sold at 20% below cost.
iPhone? Assuming that the blouses all cost the same,

b. What is the sale price of the iPhone? a. How much did each blouse cost?

c. How much did The Cellphone Company b. What was the amount of mark-up
gain or lose when the iPhone was sold realized on the purchase?
during the weekend sale?
c. What was the percent mark-up based on
3. Appliance Store realizes a mark-up of Php 3450 the selling price?
in selling TV sets. If these items are sold at a
mark-up of 40% of the selling price,
Goodluck!
a. What is the regular selling price of the TV
sets?

b. What was the cost of the TV set?

c. What is the rate of mark-up based on

cost for the TV set?

d. If overhead expenses are 27% of the

cost, what is the break-even price of the
TV set?