Markup, Mark Down, & Mark-on Flashcards
The difference between variable cost and the selling price
Markup
Other names for MARKUP
Gross Profit
Contribution Margin
Margin
BASIC Formula for MARKUP
Selling Price = Cost + Markup
The Kinds of MARKUP as RATE Formulas
- Markup Rate based on Cost = (Markup Amount/Variable Cost) x 100
- Markup Rate based on Selling Price = (Markup Amount/Selling Price) x 100
The ratio of the markup amount over the variable cost
Markup
The ratio of the markup amount over the selling price
Margin
PBR Triangle for Markup
Percentage or Portion = Base x Rate
Base = Percentage/Rate
Rate = Percentage/Base
Markup Rate Conversion
on Cost = Markup Rate on Selling Price / (1 - Markup Rate on Selling Price)
on Selling Price = Markup Rate on Cost / (1 + Markup Rate on Cost)
A deduction from the original selling price due to promotional strategies, trend changes, seasonal changes, etc.
Mark Down
Formula for Markdown
Markdown Rate = (Markdown Amount/OG Price) x 100
Markdown Amount = OG Price - Sale Price
An increase in price due to the shortage of production or caused by an approaching peak season such as Christmas
Additional Mark-on
Additional Mark-on is based on what?
Existing Selling Price
The point at which total cost and total revenue are equal, meaning there is no loss or gain for your business
Breakeven Point
Breakeven Point Formula
= Fixed Cost / Contribution Margin
where;
Contribution Margin = Selling Price - Variable Cost
