Lesson 7.6: Markup and Lesson 7.6: Markup and DiscountDiscount

TerminologySelling Price - The price

retailers charge customers

Cost - The price retailers pay to a manufacturer

Markup, margin, or gross profit - The difference between the cost of bringing the goods into the store and the selling

price

Operating expenses or overhead - The regular

expenses of doing business such as rent, wages,

utilities, etc.

Net profit or net income - The profit remaining after subtracting the cost of bringing the goods into the

store and the operating expenses

Markup and DiscountMarkup and Discount

Markup and Discount are like tax, Markup and Discount are like tax, commission, and tip questions.commission, and tip questions.

You can…You can…1)1) Change the percent to a decimal and Change the percent to a decimal and

multiply.multiply.2)2) Write a proportion like percent Write a proportion like percent

problemsproblems

Basic Selling Price Formula

Selling price (S) = Cost (C) + Markup (M)

$1,200Computer

$900 - Pricepaid to bring

computerinto store

$300 - Dollars to

cover expenses and

profit

Markup vs. DiscountMarkup vs. Discount

MarkupMarkupA retail store buys A retail store buys

items at items at wholesale wholesale pricesprices. To cover . To cover expenses and make a expenses and make a profit, the sells items profit, the sells items at higher at higher retail retail pricesprices. The extra . The extra amount is called the amount is called the markupmarkup.

DiscountDiscount

When an item is on When an item is on salesale, the store is , the store is selling the item for selling the item for less, so this is called less, so this is called discount.discount.

MarkupMarkup

Finding the amount of Finding the amount of markup.markup.

A store buys a shirt at A store buys a shirt at a wholesale price of a wholesale price of $13.50 and sells the $13.50 and sells the shirt for $24.95. How shirt for $24.95. How much was it marked much was it marked up?up?

Finding the Finding the percent of percent of markup.markup.

What is the What is the percent of markup percent of markup for the shirt in the for the shirt in the first problem?first problem?

$11.45 84.8% or 85%

MarkupMarkup

1) A store buys a pair of shoes at a wholesale 1) A store buys a pair of shoes at a wholesale price of $37.50 and sells them for $50. price of $37.50 and sells them for $50. What is the amount of markup?What is the amount of markup?

2) What is the percent of markup for the pair 2) What is the percent of markup for the pair of shoes in problem 1?of shoes in problem 1?

3) Find the cost after markup: $15 movie, 3) Find the cost after markup: $15 movie, 20% markup20% markup

DiscountDiscount

Find the amount of Find the amount of discountdiscount

A $36 book is on sale A $36 book is on sale for $27. What is the for $27. What is the amount of discount?amount of discount?

Find the percent of Find the percent of discountdiscount

What is the percent What is the percent of discount for the of discount for the book in the problem book in the problem before?before?

$9.00 25%

DiscountDiscount

1)1) A $90 coat is on sale for $76.50. What is the A $90 coat is on sale for $76.50. What is the amount of discount?amount of discount?

2)2) What is the percent of discount for the coat What is the percent of discount for the coat in problem 1?in problem 1?

3)3) Find the cost after discount: $85 radio, Find the cost after discount: $85 radio, 10% discount.10% discount.

Shopping ActivityShopping Activity

It is time to shop!

You have $1000 dollars to spend, no more!

You need to shop at least at 6 stores, where you can buy at least one item. Be sure to have at least 2 markups and 2 discounts.

Find the cost after the markup or discount.