Chapter 6 - Mark-up and Markdown

This chapter is about a consumer benefit because of the
business competition through the mark-up and markdown
of their products. Besides that, consumer also have a
choice of what to buy and where to buy it from.

Mark-up

R=C+M

where R=retail price
C=cost price
M=mark-up

Conversion of mark-up per cent

R=C+M

1+%Mc=100%+%Mc

Mark-up per cent based on retail price

%mr=%Mc
____
1+%Mc

Mark-up per cent based on cost price

R=C+M
100%=1-%Mr+%Mr

Mark-up per cent based on cost price

%Mc=%Mr
____
1-%Mr

Markdown

MD=OP-NP

where MD=markdown
OP= old retail price
NP=new retail price


%MD=MD
___ x 100%
OP

Profit and lost

where M=mark-up
OE=overhead expenses


Breakeven price=cost price+operating price

The mark-up equation, retail price=cost + mark-up can be expressed as follows

retial price=cost+net profit+operating expenses

or

R=C+NP+OE