SP = $108.50

M(on cost) = 24%

Just in case this is a homework question, I’m going to change the numbers a little. The process is the same, so you can see the example here, and then try it with your own numbers.

Let’s say that the Selling Price is $10.85 and the Markup is 24%.

Our inventory is:

SP = $10.85

M(on cost) = 24%

The selling price, $10.85 goes to the right of the diagram. The Markup on Cost goes to the left of the upper square of the diagram. Since this is a markup, the percentage is related to the cost, and the cost becomes the 100%. This goes to the left of the lower square of the diagram.

The equation SP = M + C always holds true, whether you are speaking in $ or in %. Looking at your squares, you can see that the M + C, or 24% + 100% combine to make the SP percentage of 124%.

You now have both the $ value and the % for the selling price. ($10.85 is 124% of the cost). You can now you set up your ratio.

You haven’t said what it is you are trying to find, the markup in $ or the cost in $. If you are looking for the cost, the ratio would be:

C/100% = $10.85/124%. When you cross multiply and divide you end up with ($10.85 x 100%)/124% = $8.75.

Using the same logic for finding the markup in $ you’ll get a result of $2.10.

I hope that helps and thanks for the question.

]]>So let me know when you’ve created a nice simplified BE video. That would be awesome too. 😉

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