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In this video we discuss how to solve for or calculate the markup amount in markup on cost problems for business math. We go through a couple of examples showing the steps

Transcript/notes
Let’s say that need to calculate the markup amount and you are given the selling price and the percent markup on cost.

As an example, if an item has a selling price of $18.16 and the markup on cost is 12.25%, what is the markup amount?

We are going to start by drawing a table with percents and dollar amounts for cost, markup and selling price, and we will fill in what we know. We know the selling price is $18.16, and we know the markup on cost is 12.25%, and since it is markup based on cost, the cost will be 100%. And we also know that the percent selling price based on cost will be the cost percent plus the markup percent, so, 112.25%.

To find the markup amount, we first need to find the cost amount, and since we know the selling price, $18.16, and the percent selling price on cost, 112.25%, we can use the formula for percent selling price based on cost, which is percent selling price based on cost equals, selling price amount divided by the cost amount.

Using what we know from what is given, we have 112.25%, or 1.1225, the percent selling price based on cost equals, $18.16, the selling price, over the cost amount. From here, we can multiply both sides by cost, which I have done on the screen, then divide both sides by 1.1225, and now we have cost equals, $18.16 divided by 1.1225, which calculates to $16.18 rounded off. And we can put that in the table.

Now we can use the basic markup formula, selling price equals the cost amount plus the markup amount. So, we have $18.16 equals, $16.18 plus markup. I have done the calculations on the screen and we get markup amount equals $1.98. We can put that in the table, and we have our final answer.

And here is another example where you are given the percent markup on cost and the cost amount and you have to find the markup amount.

Chapters/Timestamps
0:00 Example solve for markup amount in markup on cost problem
0:14 Draw a table to start
0:42 First find cost amount
0:54 Formula for percent selling price based on cost
1:38 Use basic markup formula to find markup amount
2:01 Another example problem