- Explain the concept of a price markup? - Provide a formula for calculating a p

Question

- Explain the concept of a price markup? - Provide a formula for calculating a price mark-up? - State which “basis” is most appropriate as the denominator in the formula and explain your reasoning as to why the basis you identified is most appropriate? - Given the following information, calculate the mark-up percentage being earned by a marketer: Product Cost Price: $25.00 Product Selling Price: $75.00 - Calculate the mark-up percentage by showing the formula used (1) and the number manipulations and then the correct final answer.?

Explanation / Answer

The concept of a price markup is the adding a percentage of profit & fixed costs on the Cost of production of the product or services, mainly the variable cost. The formula of the concept of a price markup is:

= "Total Cost ( 1 + Markup percentage) = Markup Price"

The denominator is always be 100 as being percentage figure.

Product Cost Price: $25.00 Product Selling Price: $75.00, the mark-up percentage=

=> Total Cost ( 1 + Markup percentage) = Markup Price

= $25 ( 1 + M) = $75 => M=$50 or Martup percent = 50/25 = 200%

the number of manipulations are 2 - first amount of profit and second the percentage.

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