Given: Cost = $8,750, Markup = 40%
Markup as a Decimal: 40% = 0.4
Formula:
Selling Price = Cost * (1 + Markup as a Decimal)
Selling Price = $8,750 * (1 + 0.4)
Selling Price = $8,750 * 1.4
Selling Price = $12,250
Notes:
Markup Amount = Selling Price – Cost = $12,250 – $8,750 = $3,500
Profit = Markup Amount = $3,500
Profit Margin =
Markup as a Decimal: 40% = 0.4
Formula:
Selling Price = Cost * (1 + Markup as a Decimal)
Selling Price = $8,750 * (1 + 0.4)
Selling Price = $8,750 * 1.4
Selling Price = $12,250
Notes:
Markup Amount = Selling Price – Cost = $12,250 – $8,750 = $3,500
Profit = Markup Amount = $3,500
Profit Margin =
Profit/
Selling Price
=
$3,500/
$12,250
= 0.2857 = 28.57%