## Markup Value:

The unit markup value is the profit amount added to the unit cost of a product to come up with the unit selling price. The markup amount may be expressed as a percentage of the unit selling price of the product or the unit cost of the product where the cost usually consists of the manufacturing cost and the selling & administrative cost.

The calculated value of the percent markup on the cost is 122.59%.

If the markup amount is m, the selling price (s) is given by:

• = Purchase cost + m
• = $710 + m The markup amount m is also given by: • = 55% * selling price • = 55% * s On using the above two equations we get, • s =$710 + 55% * s
• 45% * s = $710 • {eq}s = \dfrac{\$710}{45\%} {/eq}
• s = $1,582.51 The markup amount (m) is given by: • = 55% *$1,582.51
• = $870.38 The percent markup on cost is given by: • = Markup amount / purchase cost • {eq}= \dfrac{\$870.38}{\\$710} {/eq}
• = 122.59%

How to Calculate Markup: Definition & Formula

from Principles of Marketing: Help and Review

Chapter 12 / Lesson 22
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