Given: Cost = $26.25, Markup = 20%
Markup as a Decimal: 20% = 0.2
Formula:
Selling Price = Cost * (1 + Markup as a Decimal)
Selling Price = $26.25 * (1 + 0.2)
Selling Price = $26.25 * 1.2
Selling Price = $31.50
Notes:
Markup Amount = Selling Price – Cost = $31.50 – $26.25 = $5.25
Profit = Markup Amount = $5.25
Profit Margin =
Markup as a Decimal: 20% = 0.2
Formula:
Selling Price = Cost * (1 + Markup as a Decimal)
Selling Price = $26.25 * (1 + 0.2)
Selling Price = $26.25 * 1.2
Selling Price = $31.50
Notes:
Markup Amount = Selling Price – Cost = $31.50 – $26.25 = $5.25
Profit = Markup Amount = $5.25
Profit Margin =
Profit/
Selling Price
=
$5.25/
$31.50
= 0.1667 = 16.67%