BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -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-2: -Definition: Mark up refers to the value that a player adds to the cost price of a product. The value added is called the mark-up. The mark-up added to the cost price usually equals retail price. For example, a FMCG company sells a bar of soap to the retailer at Rs 10.

Detailed explanation-3: -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.

Detailed explanation-4: -The selling price can be calculated if the cost and percent markup on cost is given. When markup is based on selling price the cost is 100 percent. To place a price on perishable items, there is no need to calculate the total cost as well as total selling price of the items. Selling price = cost-markup.