This topic is made for my ABM and GAS students

1. Margin/ Gross Margin
 the ratio of mark-up to the selling price.

2. FORMULA
GROSS MARGIN =
𝑴𝒂𝒓𝒌−𝒖𝒑
𝑺𝒆𝒍𝒍𝒊𝒏𝒈 𝑷𝒓𝒊𝒄𝒆
EXAMPLE
1. SINCE THE MARK UP AND SELLING PRICE OF THE SHOE SPRAY ARE COMPUTED AS P50.00 AND P112.50,
WE HAVE:
GROSS MARGIN =
𝑴𝒂𝒓𝒌−𝒖𝒑
𝑺𝒆𝒍𝒍𝒊𝒏𝒈 𝑷𝒓𝒊𝒄𝒆
GROSS MARGIN =
𝑷𝟓𝟎.𝟎𝟎
𝑷𝟏𝟏𝟐.𝟓𝟎
GROSS MARGIN = 0.44 OR 44%

3. MARKDOWN
IS A REDUCTION IN THE SELLING PRICE OF MERCHANDISE.
STEPS TO COMPUTE SALE PRICE
1. MULTIPLY THE RATE OF MARKDOWN TO THE
SELLING PRICE TO GET THE MARKDOWN.
MARKDOWN = RATE OF MARKUP X SELLING
PRICE
2. SUBTRACT THE MARKDOWN FROM THE
SELLING PRICE TO GET THE SALE PRICE.
SALE PRICE = SELLING PRICE – MARKDOWN
SOLUTION:
COMPUTE THE MARKUP FIRST.
MARKDOWN = RATE OF MARKUP X SELLING PRICE
MD = 0.35 X P800.00
MD = P280.00
DETERMINE THE SELLING PRICE
SALE PRICE = SELLING PRICE - MARKDOWN
SALE PRICE = P800.00 – P280.00
SALE PRICE = P520.00
THE SALE PRICE OF THE SWEATER IS P520.00.

4. EXAMPLE:
• A BICYCLE IS ORIGINALLY SOLD FOR P5,600 AND IS MARKED DOWN TO SELL FOR P3,920. FIND THE
MARKDOWN AND THE MARKDOWN RATE.
Solution:
The selling price and the sale price are given. So,
Sale Price = Selling Price – Markdown
P3,290.00 = P5,600.00 – Markdown
Markdown = P1,680.00
To find the rate of markdown, we must divide the markdown by the selling price.
Markdown = Rate of Markdown x Selling Price
P1,680 = Rate of Markdown x P5,600.00
𝑷𝟏,𝟔𝟖𝟎
𝑷𝟓,𝟔𝟎𝟎
= Rate of Markdown
Rate of Markdown = 0.30 or 30%
The markdown is P1,680 and the markdown rate is 30%.

5. THANK YOU STUDENTS FOR YOUR
PARTICIPATION.
GODBLESS AND KEEP SAFE!