This document discusses mark-up and mark-up percentages in retail business. It defines mark-up as the difference between the retail price and cost price of a product, which covers business expenses and generates profit for the retailer. The document provides formulas to calculate mark-up percentage based on retail price or cost price. It includes examples of calculating retail price, mark-up, and mark-up percentage given the cost price in different scenarios.

1. Mark-up & Mark-Up Percent
Muhammad Raziq bin Aminudin
Muhammad Nor Faisal bin Noor Azmi
Ku Aina Ezanie binti Ku Badli

2. INTRODUCTION
Many business compete with one another through mark
up and mark down of their product. As a result, consumers
benefit as they are able to compare prices for the best
option and have a choice of what to buy and where to buy.
Product prices are marked down to attract more buyers and
sell off old stock

3. MARK UP
• An important principle in retail business is the proper pricing of its merchandise
• Wrong pricing may lead to a small profit or heavy loss
• The cost price is the original price of the merchandise paid by the retailer
• The retailer must add an additional amount called the mark-up to its cost to
cover its business and to provide a profit
The retailer must add an additional amount to the cost of
goods to cover the business expenses and to generate
profit

4. R = C + M
Mark up (or gross profit or gross margin) is the difference in the retail price and cost price
Where,
R = retail price
C = cost price
M = Mark-up or gross profit

5. MARK UP PERCENT
• Mark-up is usually expressed as a percent.
• It can be expressed as :
Mark-up percent based on
RETAIL PRICE
Mark-up percent based on
COST PRICE

6. Mark-up percent based on
COST PRICE
%𝑴𝒄 =
𝑴
𝑪
× 𝟏𝟎𝟎%

7. Mark-up percent based on
RETAIL PRICE
%𝑴𝒓 =
𝑴
𝑹
× 𝟏𝟎𝟎%

8. Example 1
The cost price of an antique table is RM5000. What is the retail price and mark-up
if the seller wants a 20% mark up based on :
RETAIL PRICE COST PRICE

9. Markup, M
M =
20
100
× 5000
=𝑅𝑀1000
=𝑅𝑀6000 − 𝑅𝑀5000
=𝑅𝑀1000
RETAIL PRICE
Retail price, R
R = C + M
= 5000 +
20
100
× 5000
= RM6000

10. COST PRICE
Retail price, R
R = 𝐶 + 𝑀
x = 5000 +
20
100
× 𝑥
0.8x = 5000
x = 𝑅𝑀6250
Markup, M
M = 𝑅𝑀6250 − 𝑅𝑀5000
= 𝑅𝑀1250

11. Example 2
Janet'’s shop purchased 80 shirts at a cost of RM30 each. The shop expects
that 10% of the shirt will be sold at a reduced price of RM15 each. If the shop
is to maintain a 50% markup on cost on the entire purchase, find the regular
price of the shirts

12. Cost of 80 shirts
= 30 × 80
= 2400
The shop maintains a 50% markup on cost. Then,
R = C + M
= 2400 +
50
100
× 2400
= 3600
Sale of 80 shirts
= RM3600
Sale of 8 shirts 10% × 80 = 8
= 𝑅𝑀15 × 8
= 𝑅𝑀120
Sale of 72 shirts 80 − 8 = 72
= 𝑅𝑀3600 − 𝑅𝑀120
= 𝑅𝑀3480
Regular of selling price of a shirt
= 𝑅𝑀3480 ÷ 72
= 𝑅𝑀48.33

13. Example 3
A retailer purchased 300kg of tomatoes at 50 cents per kg. A 10% spoilage is
expected. If he plans to make a 50% markup based on overall cost, what is
the selling price of the tomatoes?

14. Total cost of tomatoes
= 300 × 0.5
= RM150
Amount of (kg) left after deducting spoilage
= 300 − 10% 300
= 270
The retailers want a 50% mark-up on cost, then
R = C + M
= 150 + 150 50%
= 225
Selling price of 270 kg
= RM225
Selling price of 1kg
= 225 ÷ 270
= RM 0.83

15. Example 4: A retailer is using a 40% as markup rate on software for computers, if the cost price of a
game is 25 dollars, Calculate the selling price of a game?
Solution:
The markup = 40% cost price
Markup = 40% x 25
= 40 x 25/100
= 10
Selling price= cost + markup
=10+25
= 35
Selling Price is 35 dollars.

16. Example 5: If the markup used by the shopkeeper is 40%, then find the cost of watch, selling price for that is 63
dollars.
Solution:
Let us assume cost price is x.
markup = 40% of the cost, selling price will be the sum of markup and cost.
63 = x + (40/100)x
63 = 1.40x
x = 63/1.40
X= 45
So the cost for the shoes is 45 dollars.

17. THANK YOU FOR PAYING ATTENTION!!