Cost of an item given Selling Price of $8 and a 60% Markup on Cost

Given: Selling Price = $8,  Markup = 60%
Markup as a Decimal: 60% = 0.6
Formula:
Cost =  

Selling Price/ 1 + Markup as a Decimal

Cost =  

$8/ 1 + 0.6

Cost =  

$8/ 1.6

Cost = $5
Notes:
Markup Amount = Selling Price – Cost = $8 – $5 = $3
Profit = Markup Amount = $3
Profit Margin =  

Profit/ Selling Price

=  

$3/ $8

= 0.375 = 37.5%