Markup and

Discount

PERCENT OF CHANGE

TerminologySelling Price - The price

retailers charge customersCost - The price retailers

pay to a manufacturer

Markup, margin, or gross profit: The difference between the cost of bringing the goods into the store and the selling

price.

Operating expenses or overhead: The regular

expenses of doing business such as rent, wages,

utilities, etc.

Net profit or net income: The profit remaining after subtracting the cost of bringing the goods into the

store and the operating expenses.

Markup and Discount

Markup and Discount are like tax, commission, and tip questions.

You can…1) Change the percent to a decimal and

multiply2) Write a proportion like percent

problems

Basic Selling Price Formula

Selling price (S) = Cost (C) + Markup (M)

$1,200Computer

$900 - Pricepaid to bring

computerinto store

$300 - Dollars to

cover expenses and

profit

Markup vs. Discount

MarkupA retail store buys

items at wholesale prices.

To cover expenses and make a profit, they sell items at higher retail prices.

The extra amount is called the markup.

Discount

When an item is

on sale,

the store is selling the item for less, so this is called discount.

Markup

Finding the amount of markup.

A store buys a shirt at a wholesale price of $13.50 and sells the shirt for $24.95. How much was it marked up?

Finding the percent of markup.

What is the percent of markup for the shirt in the first problem?

$11.45 84.8% or 85%

Markup

1) A store buys a pair of shoes at a wholesale price of $37.50 and sells them for $50.

What is the amount of markup?

2) What is the percent of markup for the pair of shoes in problem 1?

3) Find the cost after markup: $15 movie, 20% markup

Discount

Find the amount of discount

A $36 book is on sale for $27. What is the amount of discount?

Find the percent of discount

What is the percent of discount for the book in the problem before?

$9.00 25%

Discount

1) A $90 coat is on sale for $76.50. What is the amount of discount?

2) What is the percent of discount for the coat in problem 1?

3) Find the cost after discount: $85 radio, 10% discount.

Shopping Activity

It is time to shop!

You have $1,000 dollars to spend, no more!

You need to shop at least at 6 stores, where you can buy at least one item.

Be sure to have at least 2 markups and 2 discounts.

Find the cost after the markup or discount.