Mark-up and margin
Both measure profit on a sale, but one compares it with the cost and the other with the selling price. Work out each one.
Task 1Mark-up: profit as a percentage of cost4 questions
All prices in this room are before VAT.
- Cost
- what the shop paid for the item
- Selling price
- what the shop sells it for
- Profit
- selling price take away cost
- Mark-up
- the profit as a percentage of the cost
To find the mark-up, divide the profit by the cost, then multiply by 100.
Worked example: a tyre costs £50 and sells for £80. The profit is £30. 30 ÷ 50 × 100 = a mark-up of 60%.
Task 2Margin: profit as a percentage of selling price4 questions