Cost of an item given Selling Price of $8 and a 23% Markup on Cost

Given: Selling Price = $8,  Markup = 23%
Markup as a Decimal: 23% = 0.23
Formula:
Cost =  

Selling Price/ 1 + Markup as a Decimal

Cost =  

$8/ 1 + 0.23

Cost =  

$8/ 1.23

Cost = $6.50
Notes:
Markup Amount = Selling Price – Cost = $8 – $6.50 = $1.50
Profit = Markup Amount = $1.50
Profit Margin =  

Profit/ Selling Price

=  

$1.50/ $8

= 0.1875 = 18.75%