Cost of an item given Selling Price of $8 and a 18% Markup on Cost

Given: Selling Price = $8,  Markup = 18%
Markup as a Decimal: 18% = 0.18
Formula:
Cost =  

Selling Price/ 1 + Markup as a Decimal

Cost =  

$8/ 1 + 0.18

Cost =  

$8/ 1.18

Cost = $6.78
Notes:
Markup Amount = Selling Price – Cost = $8 – $6.78 = $1.22
Profit = Markup Amount = $1.22
Profit Margin =  

Profit/ Selling Price

=  

$1.22/ $8

= 0.1525 = 15.25%