BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Margin is equal to sales minus the cost of goods sold (COGS). Markup is equal to a product’s selling price minus its cost price. Confusing profit margin vs. markup can lead to accounting and sales errors. For example, you might end up either under-or overpricing your products, which can cut away into your profits.

Detailed explanation-2: -When markups are based on cost the selling price is 100 percent. If the selling price and percent markup on selling price is given the actual cost can be calculated. Selling price = cost-markup. Markup represents an amount needed to cover operating expenses.

Detailed explanation-3: -Most markup problems can be solved by the equation: (Selling Price) = (1 + m)(Whole), where m is the markup rate, and the whole is the original price. Most markdown problems can be solved by the equation: Selling Price) = (1-m)(Whole), where m is the markdown rate, and the whole is the original price.

Detailed explanation-4: -Use the formula: selling price = ( 1 + markup rate ) × purchase price to solve problems involving markups. Use the formula: selling price = ( 1 + markdown rate ) × original price to solve problems involving markups.