#1.4 : Markups, Markdowns, and Additional Mark-on Flashcards
Difference between fixed cost and variable cost.
Fixed cost are costs incurred regardless of the volume of production (not output-dependent), and, Variable cost are costs that depends on the volume of production (output-dependent).
Markup amount formula
Selling Price - Variable Cost
Selling Price formula
Cost (both fixed and variable) + Markup
Markup percentage can be based from:
Cost and Selling Price (Margin)
Markup rate based on cost
Markup amount / Variable Cost x 100
Markup rate based on Selling Price
Markup amount / Selling Price x 100
Markup based on Selling Price is called _____.
margin
Whether Cost or Selling Price formula
PBR - where P= Portion, B= Base, and R= rate
To distinguish whether the Cost or SP is the base, the rate should be at what percent?
100%
Other term for markup amount
Peso Markup
It is a deduction from the original selling price due to promotional strategies, trend & seasonal changes, or surplus of products.
Markdown
Markdown amount formula
Original Selling Price – Sale Price
Markdown rate formula
Markdown amount / Original Selling Price x 100
Markdown is always based on ________.
Original Selling Price
What is sales price?
New price of the product after markdown
