Business Mathematics

Specialized Subject – ABM

Prepared by: Emmalou Shane F. Estrada, CoE

 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

MSMI’s VISION AND MISSION STATEMENT

VISION MISSION
A community of morally upright and We commit ourselves to:
highly competent citizens for quality 1. Provide relevant, diverse, quality
service. educational services for the
development of multiple
competencies and skills of
individuals.
2. Serve generously with love and
compassion for the integral
development of competent and
community service-oriented citizens.
3. Promote the culture of faith, love
and respect through active
participation in the Basic Ecclesial
Communities and other spiritual
formation activities.

LEARNING MODULE GUIDE

Every child is freely given an access to quality education. In
connection, this learning module is designed to cater your learning needs
while you are in the comfort of your homes. The goal in providing you these
learning materials is to help you maximize your potentials as you continue
to gain knowledge and develop deeper understanding on various concepts.
This aims to develop you to become independent and responsible individual
as you go through the different learning experiences. Here are the
guidelines that will direct you throughout this journey:
1. Read thoroughly the preliminaries and guidelines of your modules
before answering it.
2. Follow your class schedule that will be given by your class adviser.
3. Budget your time wisely.
4. Read directions carefully to avoid misconceptions and errors.
5. Make sure NOT to leave any activity unanswered.
6. Discussion and teacher-interaction will be available during your virtual
classes. Make sure not to miss any opportunity.
7. Accomplish all the task presented in your learning modules.
8. Submit your modules on time.
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 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

9. Lastly, as an independent learner, you are expected to personally

answer your activities but you are permitted to seek help and guidance
from your other family members.

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POLICIES FOR ASSESSMENT

1. Read all instructions properly and answer all the activities provided in
your modules.
2. Do and submit all the task required for every module both written and
performance.
3. Answer all the graded assessments and activities.
4. Accomplish your Unit tests and Quarterly assessments.

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 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

MATHEMATICS OF MERCHANDISING

Learning Objectives:
At the end of the lesson, I can …..
 Compute net price using discount method and complement method.
 Illustrate how to compute single trade discounts and discount series.
 Differentiate markup from markdown.
 Determine markup based on cost and markup based on selling price.
 Solve problems involving markup and markdown.

Vida is a student who does buy and sell on her spare time. She buys and
sells anything she believes her classmates or schoolmates would buy. If she
bought a perfume for Php 1,500.00 a bottle and she wanted a markup of
20% on cost, how much will she sell it for? If she wants a markup of 20%
based on selling price Php 1,700.00, how much will be her markup?

Buying is the acquisition of an object in exchange of money,

whereas selling is acquiring money, in exchange of relinquishing all claims
of ownership from an object. Buying and selling are two terms that are
often used relatively; when ever there is talk to buying, there is talk of
selling.
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 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

Single Trade Discounts and Discount Series

The two traditional methods for computing trade discounts are the
discount method and the complement method. You can use both methods
to find the net price that a distributor will charge the customer after the
discount.

Net Price with Discount Method

Discount = trade discount rate x list price
Net price = list price – discount

Net Price with the Complement Method

Complement rate = 100% - Trade discount rate
Net price = complement rate x list price

Example:
Bakal Supply Merchandise sells a set of stainless steel trays to Lara’s
Cookies Shop. The list price is Php 3,500.00 and Lara qualifies for a 30%
trade discount. Computer the net price using the discount method.

Solution: (discount method)

Discount = 0.30 x 3,500
= 1,050

Net price = 3,500 – 1,050

= 2,450

Solution: (complement method)

Complement rate = 100% - 30%
= 70%
Net price = 70% x 3,500
= 2,450
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mechanical, photocopying, recording, or otherwise) without prior written permission from the school.
 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

Markup and Markdown

The primary purpose of operating a business is to generate profits.
Some businesses manufacture products and sell them. Other businesses
buy products from someone else then resell these products. Both of
businesses must sell their products for more than the cost needed to
produce or purchase them to earn some profit. This is called the markup,
margin, gross profit. Markup is the amount of money that businesses add to
the cost they incurred to manufacture a product or to an item they
purchased, so that when they sell them, they can cover their initial
expenses and make a profit.

The selling price is the price at which the item is actually sold. This is
computed as the cost for the business to manufacture or purchase the item,
plus the markup. Thus,
Selling price = Cost + Markup

Selling price with Markup based on Cost

Markup = rate of markup x cost
Selling price = cost + markup

Example:
ABC Inc. buys travel mugs for Php 45.75 and sells them for 73.20. find
the rate of markup based on cost.

Solution:
Selling price = cost + markup
73.20 = 45.75 + markup
Markup = 73.20 – 45.75
= 27.45

Markup = rate of markup x cost

27.45 = rate of markup x 45.75
Rate of markup = 27.45
45.75
= 0.60 x 100
= 60%
Hence, the rate of markup based on cost is 60%.
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mechanical, photocopying, recording, or otherwise) without prior written permission from the school.
 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

Markup Based on Selling Price

Markup = rate of markup x selling price
Cost = selling price – markup

Example:
What is the cost of an item that has a selling price of Php 240.00 and a
markup rate of 60% based on selling price?

Solution:
Markup = 0.60 x 240
= 144
Cost = selling price – markup
= 240 – 144
= 96

Gross Margin
Is the ratio of the markup to the selling price, that is:

Gross margin = Markup__

Selling price

Example:
The accountant for Utik Utik Merchandise says that, in order to pay all
expenses and have a reasonable profit, and based upon a cost of Php 62.50
on its particular product, the company’s markup should be 80% of the cost.
Determine the selling price of the product.

Solution:
Markup = 0.80 x 62.50
= 50

Selling price = cost + markup

= 62.50 + 50
= 112.50

Gross Margin = 50__

112.50
= 0.44 x 100
= 44%
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mechanical, photocopying, recording, or otherwise) without prior written permission from the school.
 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

Sale Price
Markdown = rate of markdown x selling price
Sale price = selling price – markdown

Example:
A sweater that has a selling price of Php 800.00 on sale for 35% off.
What is the sale price of the sweater?

Solution:
Markdown = rate of markdown x selling price
= 0.35 x 800
= 280

Sale price = selling price – markdown

= 800 – 280
= 520

Break – even

Profit = revenue – cost

In a simple business model, the number of

items produced and sold is represented by
a variable. If x cups of coffee were sold for
a price of Php 50.00 each, the we
represent revenue as:
Revenue = 50x
And suppose the expenses for a cup of coffee is Php 25.00, then:
Cost = 25x
This gives us:
Profit = revenue – cost
= 50x – 25x
= 25x
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mechanical, photocopying, recording, or otherwise) without prior written permission from the school.
 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

Activity 1: Problem Solving

1. A 17.5% discount on a headphone amounts to Php 560.00. What is
the list price?

2. Kim’s Sound Shop marks up a speaker Php 650.00 and sells it at a

92% markup based on cost. What is the cost of the speaker? Round to
the nearest centavo.

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mechanical, photocopying, recording, or otherwise) without prior written permission from the school.
 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

3. A mobile phone is listed for Php 17,400.00 less 16%, 10%, and 8%.
What is the net price?

4. Lara’s Minigrocery pays Php 218 for an imported peanut butter and
sells it at a 78% markup based on cost. What is the selling price of the
peanut butter?

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mechanical, photocopying, recording, or otherwise) without prior written permission from the school.
 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

SKILLS ASSESSMENT
a. Applying and Connecting
Noel’s barbecue sells chicken barbecue and pork barbecue meals.
The chicken barbecue meal sells at Php 25.00, and has variable cost of
Php 5.00. The pork barbecue meal sells at Php 36.00, and has variable
cost of Php 12.00. Currently, Joe sells 5 chicken barbecue meals for
every three pork barbecue meals. Noel has fixed costs of Php 107,500
per month. How many of each dinner should Noel have to sell each
month to earn a profit of Php 10,320?

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mechanical, photocopying, recording, or otherwise) without prior written permission from the school.
 Learning Module – Business Mathematics : Specialized Subject (Q1:week 6-9)

b. Analysis and Critical Thinking

For the month of January, Organic Foods had a revenue of Php
500,000.00, variable expenses of Php 400,000.00, and fixed expenses
of Php 85,000.00. In order for the company to earn Php 100,000.00
profit for February, how much should the revenue be?

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Textbook References:
 Math for Enhanced Learning: Business Mathematics – Sibs
Publishing House, Inc.: Copyright 2016
 Business Mathematics – Rex Book Store: Copyright 2016
 Business Math – Diocesan Printing Press and Publishing, Inc.:
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Copyright 2017
No part of this material may be reproduced, stored in a retrieval system, or transmitted in any form or by any means (electronic,
mechanical, photocopying, recording, or otherwise) without prior written permission from the school.