MARKDOWN || BUSINESS MATHEMATICS
Summary
TLDRThis video lesson delves into the concept of markdown in business, a strategy where the original selling price is reduced to match competitor prices or clear old stock. The presenter explains how to calculate markdown, which is the difference between the original and new selling prices, and introduces formulas for markdown, markdown rate, and new selling price. Examples are provided, including markdown calculations for a vehicle, a cell phone, and pants, as well as a detailed scenario involving a sweater's price changes over time. The video aims to educate entrepreneurs on pricing strategies to boost sales and clear inventory.
Takeaways
- 🔢 A markdown is the difference between the original selling price and the new selling price, used by entrepreneurs to adjust prices for various reasons.
- 💼 Markdowns help businesses compete with rivals by meeting or undercutting their prices, as illustrated in the example of a sahabila offer.
- 📉 They are also used to clear old or slow-moving stock, ensuring inventory turnover and cash flow.
- 📋 The basic formula for markdown is Original Selling Price - New Selling Price.
- 📊 Another formula to calculate markdown is Original Selling Price * Markdown Rate, which helps in planning and financial analysis.
- 📈 The formula for the new selling price is Original Selling Price - (Original Selling Price * Markdown Rate).
- 📊 The markdown rate is calculated by dividing the markdown by the original selling price and multiplying by 100 to get a percentage.
- 🚗 An example provided was a vehicle with an original price of 1,890,500, reduced to 1,512,400, resulting in a markdown of 378,100.
- 📱 Another example involved a cell phone with an original price of 28,500, discounted to 18,525, showing a markdown of 9,975.
- 👖 A pair of pants originally priced at 4,680 pesos was sold at a 25% markdown, leading to a new selling price of 3,510 after the discount.
- ⌚ A complex scenario with a wristwatch involved multiple markdowns and markups, demonstrating how price adjustments can accumulate over time.
Q & A
What is a markdown in business?
-A markdown in business is the difference between the original selling price and the new selling price, often used by entrepreneurs to reduce prices to meet competitors or clear old stocks.
Why do businesses use markdowns?
-Businesses use markdowns to compete with rivals' prices, to clear out old or slow-moving stock, or to attract customers by offering discounts.
What is the formula for calculating markdown?
-The formula for calculating markdown is: Markdown = Original Selling Price - New Selling Price.
How do you calculate the markdown rate?
-The markdown rate is calculated by dividing the markdown amount by the original selling price and then multiplying by 100 to get the percentage.
What is the formula to find the new selling price after a markdown?
-The formula to find the new selling price after a markdown is: New Selling Price = Original Selling Price - Markdown.
What is the markdown amount for a vehicle originally priced at 1,890,500 pesos and sold at 1,512,400 pesos?
-The markdown amount for the vehicle is 378,100 pesos.
If a cell phone originally priced at 28,500 pesos is sold for 18,525 pesos, what is the markdown amount?
-The markdown amount for the cell phone is 9,975 pesos.
What is the new selling price of pants originally priced at 4,680 pesos when they are sold at a 25% markdown?
-The new selling price of the pants after a 25% markdown is 3,510 pesos.
How do you calculate the markdown rate for a wristwatch sold for 4,477.50 pesos when its original price was 5,970 pesos?
-The markdown rate for the wristwatch is 25%, calculated as (Markdown Amount / Original Selling Price) * 100.
What is the final selling price of an item originally priced at 40 pesos, marked up by 60%, then marked down by 25%, marked up by 30%, and finally marked down by 20%?
-The final selling price of the item after all the markups and markdowns is 49.92 pesos.
What is the markdown amount for an item originally priced at 64 pesos when it is marked down by 25%?
-The markdown amount for the item is 16 pesos, calculated as 64 pesos * 25%.
Outlines
📈 Understanding Markdown Strategy in Business
This paragraph introduces the concept of markdown in business as a strategy to reduce the prices of goods to match competitors or clear old stock. The markdown is calculated by finding the difference between the original selling price and the new selling price. The paragraph explains the importance of markdown for entrepreneurs and provides formulas for calculating markdown, markdown rate, and new selling price. An example is given where a vehicle's original price is significantly reduced, illustrating the markdown calculation process.
💼 Practical Examples of Markdown Calculation
The second paragraph delves into practical examples of calculating markdown and new selling prices using the provided formulas. It covers scenarios such as a cell phone's price reduction, important pants being sold at a 25% markdown, and a wristwatch's price reduction. Each example shows the step-by-step calculation of the markdown amount and rate, reinforcing the understanding of markdown's application in business. Additionally, a complex scenario involving multiple price adjustments over time for a wheat dreamer is presented, demonstrating how markdowns and markups can be applied sequentially.
🔢 Sequential Pricing Adjustments and Final Calculations
The final paragraph continues with the complex example from the previous paragraph, detailing the sequential pricing adjustments for a wheat dreamer over different months. It shows how a 25% markdown in July is followed by a 30% markup in September, and then another 20% markdown. The paragraph concludes with the calculation of the final selling price after all adjustments, providing a comprehensive example of how businesses might manage pricing strategies over time. The paragraph ends with a call to action for viewers to engage with the content by liking, subscribing, and staying updated for more video tutorials.
Mindmap
Keywords
💡Markdown
💡Original Selling Price
💡New Selling Price
💡Markdown Rate
💡Competitive Pricing
💡Clearing Old Stocks
💡Calculating Markdown
💡Markup
💡Final Selling Price
💡Price Reduction
💡Pricing Strategy
Highlights
Definition of markdown in business as the difference between the original and new selling price.
Markdown used to meet competitors' prices and clear old stock.
Formula for markdown: original selling price minus new selling price.
Calculating markdown from a given markdown rate.
Formula for new selling price: original selling price minus markdown.
Computing the markdown rate: markdown divided by original selling price times 100.
Example calculation of markdown for a vehicle.
Example calculation of markdown for a cell phone.
Example of calculating markdown and new selling price for pants with a 25% markdown rate.
Example of finding the markdown and markdown rate for a wristwatch.
Complex example involving multiple markdowns and markups on a wheat dreamer.
Final selling price calculation after a series of markdowns and markups.
Practical application of markdown formulas in business scenarios.
Importance of understanding markdown for inventory management and pricing strategies.
Encouragement to like, subscribe, and hit the bell button for more video tutorials.
Transcripts
[Music]
hello makawamat in this video lesson we
will discuss another strategy in
business the markdown
might not it is obtained by getting the
difference between the original selling
price and the new selling price
the results entrepreneurs reduce the
prices of commodities in order to
first
meet the prices of competitors so
like for example
you offered in sahabila so dapat and
like for example
[Music]
and then
clear the story of old stocks not
selling well so
okay
original price so yen young markdown so
a markdown
ibiza began reducing the original
selling price
citimo terminologies naga meeting
attends a video lesson
lesson at all
so markdown the original selling price
the new selling price and the markdown
rate
so the formulas
for markdown the original selling price
minus the new selling price
okay and then another formula para kuni
natan kappa given your mark down rate so
pad nothing computing your markdown so
original selling price times the
markdown rate
and for a new selling price pattern at
including a new selling price
the original selling price minus the
markdown
and then the markdown rate panning out
in computing your markdown rate marked
down divided by the original selling
price times 100. so a team of formulas
the gaga meeting at end
for example the original price of a year
old
vehicle is one million eight hundred
ninety thousand five hundred so the
manager decides to reduce the price for
one million five hundred twelve thousand
four hundred so what is the markdown
so what uh first let us identify what
are the given so the original selling
price is one million eight hundred
ninety thousand five hundred and the new
selling price is one million five
hundred twelve thousand four hundred so
the mark down so on gaga in the
manhattan minus
and from the original to the new selling
price
so that is one million eight hundred
ninety thousand five hundred minus one
million five hundred twelve thousand
four hundred
the markdown amount is three hundred
seventy eight thousand one hundred
another
the original price of cell phone is
twenty eight thousand five hundred a
year after the entrepreneur decided to
reduce the price for eighteen thousand
five hundred twenty five so what is the
markdown so madeleines
uh brandon cell phone
so the event the original selling price
is 28 500 the new selling price is 18
525
and the mark down so again so black
landing i think a guy say example number
one
so 28 500 minus 18
525 the answer is
9975 pesos
number three
the original price of important pants is
tagged at four thousand six hundred
eighty pesos and is sold now twenty five
percent less
what is the markdown and the new selling
price of the important pants so
the given or the original selling price
4 680 pesos
and then the markdown rate
is 25
or that is 0.25 in decimal so first
compute the markdown so panel nothing
compute you mark down capac original
selling price
uh markdown rate so you multiply
okay so four thousand six hundred eighty
times zero point twenty five
the answer is one thousand one hundred
seventy so you pick someone
from four thousand six hundred eighty
uh less than twenty five percent
markdown rate
so
nathan okay so tingling attention
selling price
by one thousand one hundred seventy
minus a four thousand six
so hundred eighty
langnatanyon so four thousand six
hundred eighty minus one thousand one
hundred seventy
the new selling price is three thousand
five hundred ten so i must
okay
next
the original tag of with wristwatch is
5970 pesos but is now being sold for
4477.50
so what is the markdown and the markdown
rate
so given the original selling price is
five thousand nine hundred seventy pesos
and something netany smart down and mark
down rate so
okay so that is
5970 minus 4477.50
the answer is
1492.50 markdown amount
so
you know mark down rate um
5 970 negative 4
477.50 so makani mark down rate
so
using the formula markdown that is
1492.50 divided by the original selling
price which is
5870
times 100 so the markdown rate is 25
percent
another example
a wheat dreamer was purchased for 40
pesos and was marked up 60
on cost
for a july for sale it was marked down
25 percent
after the sale it was marked up 30
percent
on september 1 it was marked down again
20 percent find the final selling price
so
from the original selling price which is
40 pesos
and
now mark up
okay now you know
you might operate not in sixty percent
so what is the
selling price so on gagawin
markup amount and multiply nothing
so 40 times
60 is 0.6 in decimal so 40 times 0.6 the
answer is 24 pesos
so from 40 pesos
mark up
it will mark up
60
so from 40 pesos
mark up the 24 pesos
that is 64 pesos so impression ion is 24
64 pesos now
perron on july 4 not marked down the
mansion and 25 percent
so no no
mark down molasses 64 pesos
marked down and 25 percent so again
computing money nothing you mark down
amount
okay so it is
md1
so you move equal compute nathan
using yumbagun selling price net 64
pesos times
your
markdown rate not 25
so 64 times 0.25
the answer is 16 pesos so your mark down
amount is 16 pesos so mula 64
in my minus 94 minus 16 the answer is 48
pesos so yen young amount no no no sale
on july 4 it was marked down 25 percent
so i'm pressing on a 48 pesos
but after no sales on the afternoon sale
it was marked up 30 percent
so molasses 48 pesos
to mass 130
percent you know amount so
markup amount
so
30
so
0.30 times 48 the answer is 14.40 so it
is
48.
uh mccann in selling price
so young bag is selling price so
10 48 plus 14.40
the answer is sixty two point forty say
two amount
no after no sale so that mark up then
thirty percent so eternal amount you
uh price
and then after nyan so on september 1 it
was marked down again by twenty percent
so molasses sixty two point forty kuni
nothing and twenty percent
the mark down
so um sixty two point
times in 20 that is 0.20 so the amount
for uh the markdown amount is
12.48 pesos
so mcconnell
final selling price netting so muladones
is 62.40 i was like nothing in 12.48
so the
final selling price is 49.92
pesos
thank you for watching this video i hope
you learned something don't forget to
like subscribe and hit the bell button
put updated ko for more video tutorial
this is your guide in learning your mod
lesson your walmart channel
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