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Module 3. Mark-On, Mark-Up & Mark-Down

The document discusses various pricing strategies used by businesses including mark-on, mark-up based on cost and selling price, converting between the two, and mark-down. Formulas are provided for calculating pricing based on initial cost, selling price, mark-up amount and rate. Examples are given to demonstrate calculating pricing for different products using these strategies.

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Christian Verdadero
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491 views4 pages

Module 3. Mark-On, Mark-Up & Mark-Down

The document discusses various pricing strategies used by businesses including mark-on, mark-up based on cost and selling price, converting between the two, and mark-down. Formulas are provided for calculating pricing based on initial cost, selling price, mark-up amount and rate. Examples are given to demonstrate calculating pricing for different products using these strategies.

Uploaded by

Christian Verdadero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Buying and Selling

1. Mark – on
 The difference between the initial cost and the selling cost. Mark – on
happens when there is natural calamity, seasonal demands, special
occasions etc.

Note: Mo = Mark – on
MoR = Mark – on Rate
IC = Initial Cost
SP = Selling Price

FORMULAS:
Mo = IC x MoR
Mo
Mor = × 100
IC
SP = IC + Mo
Mo = NSP - SP

Examples:
1.) Mrs. Forda bought 100 kg of pomelo at Php 110 per kg. She desires to have
25% mark-on rate of this product.
a.) What is the mark-on?
b.) How much is the selling price
c.) How much is the total possible profit?

2.) Mr. Balbas, fishery products entrepreneur, has decided to apply a mark-on
based on initial cost of the fishery products. She desires 15% for fresh squid,
20% for dried squid, and 25% for squid rings. She bought fresh squids at Php
80 per kilogram, Php 450 and Php 500 per kilogram, respectively.
a.) What is the mark-on for fresh squid, dried squid and squid rings?
b.) What is the selling price for the fresh squid, dried squid and squid
rings?

3.) Mrs. Gasapo bought an item for Php 800 and sells it for Php 900. What is
the mark on and the mark – on rate?

2. Mark – up
 The difference between the cost of the item and its selling price.
 A mark-up is added to the total cost incurred by producers of goods or
services.
 Cost Price – the price that a merchant pays for an item.
 Selling Price – the price in which the commodity is sold per unit.
 Mark-up Rate
o Mark – up rate based on cost- the ratio of mark -up to its cost
expressed in percent.
o Mark- up rate based on selling price- the ratio of the mark-up to
its selling price expressed in percent.

Formulas:
Selling price = Mu + C
Mark -up = SP – C
Cost = SP – Mu

Examples:
1. An office table with a total cost of Php 2,300 is sold for Php 2,900. What is
the amount of mark-up?

2. The list of pair of shoes in a discount store is Php 650. The item cost Php
490. After negotiation with a buyer, the pair of shoes was sold at Php 550.
What is the initial mark-up and the maintained mark-up price?

3. Mrs. Ravena, an entrepreneur, has 500 bags remaining stock of cement. The
previous selling price of cement was Php 175 per bag and the current selling
price is Php 220 per bag.
a.) What is the mark-up?
b.) How much is her total based on the mark-up?

Mark-up on Cost
 When the mark- up is a percent of the cost, the cost becomes the base or
the 100%
 Suppose an item had 25% mark-up on cost; then the formula would be:
SP = C + Mu
125% = 100% + 25%
Thus, the selling price is 125% of the cost.

FORMULAS:
Mu = MuR x C
Mu
MuR =
C
Mu
C=
MuR

Example:
1. Find the mar-up and selling price that costs Php 24 if there is a 35% mark-
up cost.

2. If the mark-up on a marker is Php 18 and the mark-up rate is 30% on cost,
find the cost and the selling price of the marker.
Mark-up on Selling Price
 When the mark-up is based on the selling price, the selling price
becomes the base or 100%.
 For example, if there is a 25% mark -up on the selling price, the
formula would be:
Selling price = Cost + Mark-up
100 % = 75% + 25%

FORMULAS:
Mark – up = MuR x SP
Mu
MuR =
SP
Mu
SP =
MuR

Examples:
1. A sandals sells for Php 150. If there is a 30% mark-up on the selling price,
find the cost and the amount of mark-up.

2. If the mark-up on a ballpen is Php 6 and the mark-up rate is 30% of the
selling price, find the selling price and the cost.

Converting Mark-up based on Cost to Mark-up based on Selling Price and


Vice Versa
Mu cost
 Mu sp=
1+ Mu cost
Mu sp
 Mu cost =
1−Mu sp

Examples:
Mu cost Mu sp Mu sp Mu cost
1.) 60% 1.) 40%
2.)200% 2.) 150%

Mark- down
 It is obtained by getting the difference between original selling price and
the new selling price.
 Entrepreneurs reduce the prices of commodities in order to meet the
prices of competitors, attract more customers, have more sales and
clearing old stocks.

Note:
Md = Mark-down
OSP = Original Selling Price
NSP = New Selling Price
MdR= Mark-down Rate

FORMULAS:
Md = OSP – NSP
Md = OSP x MdR
NSP = OSP – Md
Md
MdR = x 100
O SP

Examples:
1. The original price of a year-old vehicle is Php 1, 890, 500. The
manager decided to reduce the price for Php 1, 512, 400. What is the
mark-down?

2. The original price of cellphone is Php 28, 500. A year after, the
entrepreneur decided to reduce the price for 20, 200.What is the mark-
down?

3. The original price of a branded pants is Php 4, 680 and being sold at
25% less. What is the markdown and the new selling price of the
branded pants?

4. The original tagged of wristwatch is Php 5, 970 but is now being sold
for 4, 477.50. What is the mark-down and mark-down rate.

5. A weed trimmer was purchased for Php 40 and was marked up 60%
on cost. For July 4 sale, it was marked down 25%. After the sale, it was
marked uo 30%. On September 1, it was marked down 20%. Find the
final selling price.

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