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11.2A Mark-ups, Cost of Sales and Selling Price

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VCE Accounting Unit 3

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11.2A Mark-ups, Cost of Sales and Selling Price

  1. 1. 11.2A MARK-UPS, COST OF SALES AND SELLING PRICE
  2. 2. © Michael Allison, Trinity Grammar School. Author’s permission required for external use  When recording sales of stock, you may need to calculate the Mark-Up of the stock… Mark-Up • The amount added to the cost price of stock to determine its Selling Price. • Represents the Gross Profit on each sale. Cost of Sale Gross ProfitRevenue - =$50 $150$200 Mark-Up Selling PriceCost Price + =$150 $200$50 11.2A MARK-UPS, COST OF SALES AND SELLING PRICE
  3. 3. © Michael Allison, Trinity Grammar School. Author’s permission required for external use  Example: a firm sold an iPod Nano costing $100 for a 100% Mark-Up 1 + Mark-UpSelling Price Cost Price x= 1 + 1.0$200 $100 x= 2.0 11.2A MARK-UPS, COST OF SALES AND SELLING PRICE
  4. 4. © Michael Allison, Trinity Grammar School. Author’s permission required for external use  Example: a retailer adds a 50% Mark-Up to Xbox’s which have a cost price of $100 1 + Mark-UpSelling Price Cost Price x= 1 + 0.5$150 $100 x= 1.5 11.2A MARK-UPS, COST OF SALES AND SELLING PRICE
  5. 5. © Michael Allison, Trinity Grammar School. Author’s permission required for external use  Other times you may be given the Selling Price and the Mark-Up and be asked to calculate the Cost of Sale…  Example: Rebel Sport sells NBA Jerseys for $100 at a 100% Mark-Up 1 + Mark-UpSelling PriceCost Price = / 1 + 1.0$100$50 = / 2.0 11.2A MARK-UPS, COST OF SALES AND SELLING PRICE
  6. 6. © Michael Allison, Trinity Grammar School. Author’s permission required for external use  Example: Rebel Sport sells football boots for $150 at a 50% Mark-Up 1 + Mark-UpSelling PriceCost Price = / 1 + 0.5$150$100 = / 1.5 11.2A MARK-UPS, COST OF SALES AND SELLING PRICE
  7. 7. © Michael Allison, Trinity Grammar School. Author’s permission required for external use TASK In-class Homework SQ11 X

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