Given: Cost = $86,000, Markup = 20%
Markup as a Decimal: 20% = 0.2
Formula:
Selling Price = Cost * (1 + Markup as a Decimal)
Selling Price = $86,000 * (1 + 0.2)
Selling Price = $86,000 * 1.2
Selling Price = $103,200
Notes:
Markup Amount = Selling Price – Cost = $103,200 – $86,000 = $17,200
Profit = Markup Amount = $17,200
Profit Margin =
Markup as a Decimal: 20% = 0.2
Formula:
Selling Price = Cost * (1 + Markup as a Decimal)
Selling Price = $86,000 * (1 + 0.2)
Selling Price = $86,000 * 1.2
Selling Price = $103,200
Notes:
Markup Amount = Selling Price – Cost = $103,200 – $86,000 = $17,200
Profit = Markup Amount = $17,200
Profit Margin =
Profit/
Selling Price
=
$17,200/
$103,200
= 0.1667 = 16.67%