Learning Area Grade Level 11

W5
BUSINESS MATHEMATICS
Quarter Third (3rd) Quarter Date

I. LESSON TITLE Mark-on, Mark up, and Markdown

II. MOST ESSENTIAL LEARNING The learners
COMPETENCIES (MELCs) ● differentiate mark-on, markdown, and mark up
● obtain mark-on, markdown, and mark up given the price of a product
ABM_BM11BS-Ig-1
III. CONTENT/CORE CONTENT Key Concepts in Buying and Selling
Reference: Business Math textbook by Lopez
Suggested
IV. LEARNING PHASES Learning Activities
Timeframe
A. Introduction 10 minutes DAY 1
Panimula Good day, welcome to our lesson.
At the end of the lesson, you are expected to:
1. define, differentiate, and explain the reasons for using mark-on,
markdown, and mark up;
2. determine the selling price, sale price, or peak price of an item
given existing conditions;
3. solve problems related to mark-on, mark up, markdown; and
4. obtain the selling price after mark-on, mark up, and markdown.

During the Christmas season, malls and big department stores typically
display this signage

SALE !
Special occasions like Christmas is a season of giving, so people tend to
spend more during these days. Aside from malls, Divisoria is a place where
we can buy various gifts at a lower price. Sometimes we used to hear sellers
saying “Bente bente lang, mura na bili na kayo!”

Consider this question.

Have you ever wondered how to price a particular item to be sold at a
lower price?

One of the primary objectives of business owners is to earn a profit. They

tend to minimize the company's expenses to generate more profit. Recall
your TLE class when you were in elementary and junior high school. You
were taught how to make a product and how to sell it to gain a profit.

To check your previous knowledge and skills in determining the rate, base,
and percentage, you are tasked to do the activity. Turn on page 73 with
item numbers 1 to 5 in your textbook. Write your answer in your notebook.

Did you get all the correct answers? The answers were already provided in
your textbook.

B. Development 30 minutes
Pagpapaunlad After recalling concepts on rate, base, and percentage you are now ready
to learn new concepts on mark-on, mark up, and markdown.

Reading for meaning:

Open your textbook on pages 72-77 and read lessons on mark up, mark-on,
and markdown.

To deepen your knowledge, the mark up is the amount that needs to cover
expenses incurred in the production or the making of a product to sell or a
service to offer.
Let me give you a concrete example of this.

If I plan to sell banana cues, I need to know the ingredients and other
materials, their quantity, and the unit cost. Shown below in Table 1 is the cost
incurred in preparing banana cue

Table 1: Costing of product

Ingredients/ Items Unit Quantity Unit cost Total cost
(A) (B) (A x B)
semi-ripe or ripe saba piece 10 ₱3 ₱ 30.00
banana

brown sugar cup ½ 15.00 15.00

Vegetable cooking oil cup 2 10.00 20.00

bamboo sticks/ skewers piece 10 0.50

TOTAL COST ₱65.00

The total cost that will be incurred in cooking 10 pieces of banana is ₱65.00.
Suppose that I want to earn a profit of 25% of the cost. How much will I sell it
for?

Here is the step-by-step procedure in calculating the selling price of banana

cue using the concept of mark-up.

First, calculate the cost of each cooked banana

Total cost for ten pieces ₱65
Divide by the number of banana cooked 10
Cost of each cooked banana ₱ 6.50

Second, there will be 2 bananas for each bamboo stick/ skewer

Cost of 2 banana (₱6.50 x 2) ₱13.00
Add: cost of 1 bamboo stick/ skewer 0.50
Total cost of 1 banana cue ₱13.50
Add: Transportation cost 1.00
Total Cost ₱14.50
Aside from the cost incurred in preparing banana cue, there are expenses
for utilities like water, electricity, and other expenses that may be incurred.
This type of expenses is classified as operating expenses.

The lower the operating expenses the higher the profit and vice versa. If the
goal is to earn 25% of the cost, and allot 30% of the cost to cover up other
expenses, what will be the markup? On page 73 of your textbook, the
formula on how to compute the markup is provided.

Let us apply the formula:

Markup = Expenses + Profits
= (₱14.50 x 30%) + (₱14.50 x 25%)
= ₱4.35 + ₱3.63
= ₱7.98
To compute for the selling price
Selling price = Cost + Markup
= ₱14.50 + 7.98
= P22.48
The selling price of each banana que is ₱22.48
To compute for the net income:
Selling price ₱22.48
Less: cost 14.50
Markup ₱ 7.98
Less: Operating expense 4.35
Net Income ₱3.63
 Typically the selling price of banana que ranges from ₱10.00 to ₱15.00, the
computed price of the banana que in our illustrations is ₱22.48 to match the
competitor’s price, and we will reduce the price closer to the price of our
competitor. The reduction of price is called markdown.

On page 74 of your textbook, read the discussion on markdown. The formula

for computing markdown is provided.

On certain occasions, a particular item increases in price. Before and

during Valentine's day, the price of the flowers increases. The increased
amount is called mark-on. Read the discussion about mark-on on your
textbook pages 75 to 77.

Things to ponder
Knowledge of basic accounting through the concept of markup, mark-on,
and mark-down will help you manage your business well.
C. Engagement 20 minutes To further enhance your knowledge of the concept learned, do the following
Pakikipagpalihan activities.

Activity 1
To practice your problem-solving skills, answer problem A numbers 6, 12,
and 15 on page 78 of Business Math Textbook by Lopez Write your
answers in your notebook.

Activity 2
Entrepreneurial mind setting
Create a table of a chosen item that you want to sell applying the concept
of mark-up, mark-down, and mark-on. Follow the table presented on the
development part of this Leap. Write your answer in your notebook.

D. Assimilation 20 minutes DAY 2

Paglalapat The concept of markup, markdown, and mark-on provide a clear
presentation of data needed by a business owner to be successful in their
business venture. To help you realize the importance of this concept answer
the following questions:
1. What are the reasons why business owners decided to reduce the
price of their products? (state at least four reasons)

2. In your own opinion, what is the fair mark-up rate to set for a
product to sell?

3. What are the reasons why the price of a product will be increased?

V. ASSESSMENT 25 minutes Check what you have learned.

(Learning Activity Sheets for Answer exercise A on page 78 of Business Math Textbook by Lopez. Write
Enrichment, Remediation or
Assessment to be given on Weeks your answer in your notebook.
3 and 6)
VI. REFLECTION 15 minutes In your notebook, write your insights about the lesson using the prompts
below.
I understand that ___________________.
I realize that ________________________.
I need to learn more about __________.

Prepared by: Eva C. Topacio, SDO Imus City Checked by: Dr. Josephine P. Canlas, Adora G. Del Mundo,
Jeramie G. Buensuceso