BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The price at which merchandise is offered for sale to the customer
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Also known as gross profit and gross margin
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Original price of the goods paid by the retailer to the manufacturer or supplier
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Amount added to the cost in order to cover business expenses and generate profit
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The difference between the cost price and its selling price
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Detailed explanation-1: -Mark up price is also defined as the difference between the average selling price per unit and the average cost price per product. Hence, the markup price formula = Sales Revenue-Cost of goods sold/ Number of units sold.
Detailed explanation-2: -According to Corporate Finance Institute, “markup is the difference between the selling price of a product and its cost.” The markup on cost is the amount added to the cost of a product or service to arrive at the selling price. The markup on cost is expressed in percentage terms.
Detailed explanation-3: -The markup, also known as the margin, or gross profit. is the difference between the selling price and operating expenses (M = S-C). The markup also represents the sum of expenses and the profit.
Detailed explanation-4: -Markup shows how much more a company’s selling price is than the amount the item costs the company. In general, the higher the markup, the more revenue a company makes. Markup is the retail price for a product minus its cost, but the margin percentage is calculated differently.
Detailed explanation-5: -Cost price is actually the ultimate price at which the seller buys the product or service. He then adds a percentage of profit to it. The list price or marked price is the price which a seller fixes after adding the needed percentage of profit.