Assume an item costs $2.00.
If the firm wants a markup of 40% based on the selling price, what would be the final price?
How to Calculate Markup:
Markup refers to the amount (usually expressed as a percentage of the purchase price) that is added to the cost of a product to calculate the selling price. The aim is for the markup amount to cover the operating expenses and generate profit.
Answer and Explanation:
Remeber that selling price = cost + markup:
|Cost per item||$2.00|
($2 x 0.40)
|Final Selling Price||$2.80|
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from Principles of Marketing: Help and ReviewChapter 12 / Lesson 22