Cost of an item given Selling Price of $8 and a 20% Markup on Cost

Given: Selling Price = $8,  Markup = 20%
Markup as a Decimal: 20% = 0.2
Formula:
Cost =  

Selling Price/ 1 + Markup as a Decimal

Cost =  

$8/ 1 + 0.2

Cost =  

$8/ 1.2

Cost = $6.67
Notes:
Markup Amount = Selling Price – Cost = $8 – $6.67 = $1.33
Profit = Markup Amount = $1.33
Profit Margin =  

Profit/ Selling Price

=  

$1.33/ $8

= 0.1663 = 16.63%