Markup Mark on and Markdown : Grade 11 Business Mathematics

Summary

In this business mathematics class led by Teacher Andy Guzman, the focus is on markup, marcon, and markdown. Key concepts such as cost, retail price, and markup are explained, including their formulas and applications. The class covers calculating retail price, percent markup, and gross profit margin, using examples like shirts and toys to illustrate. Additionally, markdowns and their impact on sales prices are discussed, along with the concept of trade discounts. The video offers practical problems to demonstrate the real-world application of these concepts in business settings.

Takeaways

• 💼 The cost is the amount spent by a person or group to start a business.
• 🏬 Retail price is the price at which goods are sold in the market.
• 📈 Markup is the additional amount added to the cost to achieve profit.
• 🔢 The retail price formula is: Retail Price = Cost + Markup.
• 📊 The percent of markup formula is: Percent Markup = (Markup / Cost) * 100%.
• 👕 Example 1: A shirt with a retail price of 200 pesos and a markup of 40 pesos has a cost of 160 pesos.
• 🚲 Example 2: A toy costing 250 pesos with a 60% markup has a retail price of 400 pesos.
• 👕 Example 3: A shirt with a retail price of 500 pesos and a markup of 100 pesos has a markup percentage of 25%.
• 💰 Example 4: A bag costing 200 pesos with a 40% markup based on the retail price would sell for 4000 pesos.
• 📉 Gross profit margin is calculated as: Gross Profit Margin = Sale Price - Unit Cost.
• 🔄 Mark on Marco is a special amount added to the retail price for specific purposes, different from the general markup.
• 💸 Markdown is the amount reduced from the original selling price, calculated as: Markdown = Original Retail Price * Percent of Markdown.
• 🛍️ Trade discount is a reduction from the retail price, also known as a straight discount.

Q & A

What is the definition of 'cost' in the context of business?

In the context of business, 'cost' refers to the amount spent by the person or group who is putting up the business.

What is meant by 'retail price' in the transcript?

The 'retail price' is the selling price or the amount for which a merchandise is sold in the market.

Can you explain the term 'markup' as described in the video?

Markup is the amount the retailer adds on to the cost in order to gain profit.

What is the formula for calculating the retail price according to the transcript?

The formula for calculating the retail price is: Retail Price = Cost + Markup.

How is the percent of markup calculated as mentioned in the script?

The percent of markup is calculated as: Percent of Markup = (Markup / Cost) * 100%.

In the example given, what is the cost of producing one shirt if the retail price is 200 pesos and the markup is 40 pesos?

The cost of producing one shirt is 160 pesos, which is calculated by subtracting the markup from the retail price: 200 pesos - 40 pesos.

What is the formula to determine the markup based on cost?

The formula to determine the markup based on cost is: Markup = Percent of Markup * Cost.

How can you find the retail price if you know the cost and the percent markup?

You can find the retail price by adding the markup to the cost, where the markup is calculated as the percent markup times the cost.

What is the percent of markup for a shirt that costs 500 pesos with a markup of 100 pesos?

The percent of markup for the shirt is 25%, calculated by dividing the markup (100 pesos) by the cost (400 pesos) and then multiplying by 100.

If Grace gets a bag at a cost of 200 pesos and wants to sell it at a 40% markup based on the retail price, how much will she sell the bag for?

Grace will sell the bag for 4000 pesos. This is calculated by first determining that the 40% markup is of the retail price, and then solving the equation where 60% of the retail price (100% - 40% markup) equals the cost (200 pesos), leading to a retail price of 4000 pesos.

What is the difference between markup and gross profit margin?

Markup is the amount added to the cost to determine the selling price and is always greater than the gross profit margin. Gross profit margin is the difference between the sale price and the unit cost, indicating the strength of the retail business.

How is the markdown calculated when a product is on sale?

Markdown is calculated as a percentage of the original retail price. It is the amount reduced from the original selling price, calculated by: Markdown = Original Retail Price * Percent of Markdown.

What is the sale price of a hoodie originally priced at 800 pesos with a markdown of 35%?

The sale price of the hoodie is 520 pesos, calculated by subtracting the markdown (800 pesos * 35% = 280 pesos) from the original price.

Outlines

00:00

📈 Understanding Markup and Retail Pricing

Teacher Andy Guzman introduces the concepts of cost, retail price, and markup in the context of business and mathematics. The cost is the amount spent to establish a business, retail price is the market selling price, and markup is the additional amount added to the cost for profit. The formulas discussed include retail price = cost + markup and percent of markup = (markup / cost) * 100%. An example is given where a shirt has a retail price of 200 pesos with a 40-peso markup, leading to a cost of 160 pesos. The lesson also explores how to calculate markup based on cost or retail price and how to determine the percentage of markup.

05:02

🔢 Calculating Retail Price and Markup Percentage

This section delves into calculating the retail price and markup percentage. An example is provided where a toy costing 250 pesos has a 60% markup based on cost, resulting in a retail price of 400 pesos. Another example calculates the markup percentage for a sales kit with a cost of 500 pesos and a 100-peso markup, determining the markup percentage to be 25%. The paragraph also explains the difference between markup and gross profit margin, highlighting that markup is always greater than the gross profit margin. The concepts of mark on marco and markdown are introduced, with examples of how to calculate the cost of a product and gross profit margin.

10:04

💹 Applying Markdown to Determine Sale Prices

The final paragraph focuses on markdown, which is the reduction from the original selling price. It explains how markdown is calculated as a percentage of the original retail price and provides examples. In one scenario, a hoodie with a list price of 800 pesos is sold with a 35% markdown, resulting in a sale price of 520 pesos. Another example involves a bicycle originally sold for 5600 pesos but marked down to 3920 pesos, with a markdown of 1680 pesos and a markdown rate of 30%. The paragraph concludes with a summary of the lesson on markup, mark on, and markdown, encouraging viewers to subscribe for more educational content.

Keywords

💡Cost

Cost refers to the amount spent by the person or group who is putting up the business. In the video, cost is defined as the initial investment required to produce or acquire goods for resale. It is a fundamental concept in the video's discussion of markup and markdown calculations, as it is the base from which markups are added to achieve a selling price. For instance, in the example of a shirt, the cost is calculated by subtracting the markup from the retail price, showing how cost is integral to determining the retail price.

💡Retail Price

Retail price is the selling price or the amount for which a merchandise is sold in the market. The video emphasizes that retail price is a crucial component in the business's revenue model, as it is the price at which goods are offered to consumers. It is derived by adding the markup to the cost, and it is the price that directly affects the consumer's purchasing decision. The video uses the retail price in various examples to demonstrate how markups and markdowns influence the final price that consumers pay.

💡Markup

Markup is the amount the retailer adds to the cost in order to gain profit. It is a key concept in the video, as it represents the retailer's strategy to cover costs and earn a profit. The video explains that markup can be calculated using the formula: retail price = cost + markup. It is also discussed in terms of percentage, where the percent of markup is calculated as (markup / cost) x 100%. The video provides examples, such as a shirt with a 40 peso markup, to illustrate how markup is applied to determine the retail price.

💡Percent of Markup

Percent of markup is the rate at which the markup is applied to the cost, expressed as a percentage. It is used in the video to show how much of the cost is covered by the markup, which helps in understanding the retailer's profit margin. The video explains that it is calculated as (markup / cost) x 100%. This concept is used to compare different markup rates and to make decisions on pricing strategies, as seen in the example where a 60% markup on a toy is calculated.

💡Gross Profit Margin

Gross profit margin is computed as the sale price minus the unit cost. It indicates the strength of the retail business and is a measure of profitability. In the video, gross profit margin is discussed in relation to markup, highlighting that while markup is always greater than the gross profit margin, they are related through the formula: markup percent = gross profit margin / unit cost x 100. The video uses this concept to explain the difference between the amount added to the cost (markup) and the actual profit realized (gross profit margin).

💡Markdown

Markdown is an amount reduced from the original selling price, often to encourage sales or clear inventory. The video introduces markdown as a strategy used by retailers to decrease the retail price after it has been set. It is calculated using the formula: markdown = original retail price x percent of markdown. The video provides an example of a hoodie being sold with a markdown, demonstrating how markdown affects the final sale price and the consumer's savings.

💡Percent of Markdown

Percent of markdown is the rate at which the markdown is applied to the original retail price, expressed as a percentage. It is used in the video to determine the extent of the price reduction. The video explains that it is calculated as (markdown / original retail price) x 100%. This concept is crucial for understanding the impact of markdowns on the final sale price and the retailer's strategy for moving products.

💡Trade Discount

Trade discount, also known as straight discount, is an amount marked down from the retail price, often given to retailers or bulk buyers. The video discusses trade discount as a type of markdown that can be applied to the retail price, differentiating it from markdown which is applied to the cost. The concept is used to explain different types of discounts and their effects on the selling price, as seen in the example of a bicycle that is marked down from its original price.

💡Profit Margin

Profit margin is a financial metric that indicates how much profit a company makes for every unit of sale, calculated as (net income / revenue) x 100%. While not explicitly detailed in the video, profit margin is implicitly related to the concepts of markup and gross profit margin. The video's discussion on markup and gross profit margin indirectly touches on the importance of profit margins in retail businesses, as they are key indicators of financial health and profitability.

💡Selling Price

Selling price is the price at which a product is sold to the end consumer. The video discusses selling price in the context of calculating markups and markdowns, emphasizing its importance in determining the final price that consumers pay. The selling price is derived from the cost plus the markup, and it is the price that directly influences consumer purchasing decisions and the retailer's revenue.

Highlights

Introduction to the topic of markup, markdown, and martel for business mathematics.

Definition of 'cost' as the amount spent to start a business.

Explanation of 'retail price' as the selling price in the market.

Description of 'markup' as the amount added to cost for profit.

Presentation of the formula: Retail Price = Cost + Markup.

Introduction of the percent markup formula: Percent Markup = (Markup / Cost) * 100%.

Application problem 1: Calculating the cost of a shirt with a given retail price and markup.

Application problem 2: Determining the retail price of a toy based on cost and markup percentage.

Application problem 3: Finding the percent of markup for a shirt given its retail price and markup amount.

Application problem 4: Calculating the selling price of a bag with a desired markup percentage based on the retail price.

Discussion on gross profit margin as a measure of retail business strength.

Explanation of the relationship between markup percent and gross profit margin.

Definition and calculation of 'mark on marco' for specific purposes.

Application of formulas to determine cost and gross profit margin from selling price and markup.

Introduction to 'markdown' as a reduction from the original selling price.

Explanation of formulas related to markdown: Markdown = Original Retail Price * Percent of Markdown and Percent of Markdown = (Markdown / Original Retail Price) * 100%.

Application problem involving the calculation of sale price after a markdown on a hoodie.

Application problem calculating markdown and markdown rate for a bicycle with an original and sale price.

Conclusion of the lesson on markup, markdown, and martel with a call to action for subscribing to the channel.

Transcripts

hello and good day welcome back to our

class

this is teacher andy guzman and our

topic for today is markup

marcon and martel for business

mathematics

so let's have the following words the

first one is the cost

represent amount spent by the person or

group who is putting up the business

next is retail price refers to the

selling price or the amount for which a

merchandise is sold in the market

and markup is the amount the retailer

adds

on to the cost in order to gain profit

for the formula that we will use we have

the retail price is equal to cost plus

markup

as well as the percent of markup is

equal to markup divided by cos

times one hundred percent

so let's have application number one so

process assured

for 200 pesos with a markup of 40 pesos

what is the cost of producing one shirt

so again let's identify

the given so we have the retail price is

equal to 200 pesos

well the markup is 40 pesos now in order

to find the

cost that is actually retail price minus

markup

so we have cos is equal to 200 minus 40

so cos is equal to 160 pesos

so therefore the cost of a shirt is 160

pesos

sometimes retailers are more interested

in the rate of markup

than in the apple market price in such

case markup is computed as a percent

known as percent markup there are two

ways to determine the markup so the

first one

is based on costs take note that markup

is equal to percent of markup times cost

now in order to determine the percentage

markup that is equal to markup divided

by cos

times 100 on the other hand we can

determine the markup

based on the retained price so

we have the markup is equal to percent

of markup times retained price

or the percent of markup is equal to

markup

divided by retained price times one

hundred percent

let us consider problem number two so

stop toy costs 250 pesos to manufacture

and it's marked up 60 based on costs

so what is the retail price of the stock

point so first let's identify the given

so the cost is 250 pesos and the percent

markup

is 60 so again for our step number one

we have markup is equal to percent

markup times the cost

so the markup is equal to 60 times 250

so your markup is equal to 150

pesos next we want to find out the

retail price so that

is equal to cost plus markup so we have

250 plus 150

so the retail price is equal to 400

pesos

so therefore the retain price is equal

to 400

pesos let us consider problem number

three

so what is the percent of markup of that

shirt based on the cost of the sales kit

for 500 pesos

with a markup of 100 pesos so let's

identify first a given

so the retail price is equal to 400

pesos while the markup is equal to 100

vessels

so for our step number one we will find

out the cost so that is equal to retail

price

minus markup so we have 500 minus 100

so the cost is equal to 400 pesos

step number two so percent of markup is

equal to markup divided by cos

times 100 substitute the value of markup

and cost

so that is 100 divided by 400 times

100 so the percent of markup is equal to

25 so therefore we can say that the

markup

is 25

let's move on to problem number four so

grace get a bug at a cost of 2

hundred pesos and wants to sell it at

forty percent markup based on a retained

price

how much will she sell the bug for

so let's identify the given so the

retail price is equal to two thousand

four hundred pesos

but the markup is 40 so the retail price

is equal to

cost plus mark up and remember that the

retail price is actually your 100

percent retained price

so the cost is two thousand four hundred

but your markup is forty percent

of your tail price now if i'll subtract

both side of the equation

by forty percent of retail price so you

come up with one hundred percent

retail price minus 40 retail price

this is equal to 60 percent retail price

so on the right hand side we have only

two thousand

four hundred but i want to find out the

value of the retained price

so i divide both sides of the equation

by

sixty percent

so therefore we can say that the retail

price is equal to four thousand

pesos

while the markup may be taught as the

amount that the retailer earns from the

same

there is another quantity that measures

the level of retained success

this is the profit margin or gross

profit margin

it is computed as follows so we have

gross profit margin

is equal to sale price minus unit cost

this margin indicates the strength of

the retail business

it impacts market percent with the

following relationship

so markup percent is equal to gross

profit margin divided by unit cost times

100

while the quantities are related they

are not entirely

similar markup is always greater than

the gross profit margin

this spark often leads to the incorrect

notion that a seller is earning a

certain amount of profit

when in part he is earning less and

other definitions that

we will talk about is the mark on marco

is a special

amount added to the retail price for

specific

purpose if a product with a selling

price of 62 pesos and 50 cents as a

markup

then we have as follows so for our cost

of product

so that is selling price divided by 100

plus markup percent so that is 60 to

50 divided by 100 plus 25

or this is equal to 6250

divided by 125

that 125 percent is equal to 1.25 so

again 6250 divided by 1.25

is equal to 50 pesos so this

is the cost of product next

the gross profit margin is equal to sale

price minus unit cost

so again 6250 minus 50

so your gross profit margin is equal to

1250 pesos

on the other hand your percent profit

margin is equal to gross profit margin

divided by unit cost

so we have 1250 divided by 6250

so this is equal to 20

what it is important to note amounts

that should be added to the

costs determining the selling price also

entails knowing when to reduce the

selling price by certain amount

at appropriate times an amount reduced

for the original selling price is called

markdown again so markdown is an amount

reduced from the original

selling price on the other hand markdown

is equal to original retained price

times percent of mark now also

we have this formula percent of markdown

is equal to markdown

divided by original retail price times

100

or sometimes the markdown is commonly

known as straight discount

again so trade discount is an amount

marked down from

the retail price

so let's have the application for

markdown let's consider this

so a hoodie that has a list price of 800

pesos

is on sale for 35 off so what is the

sale price

of the hoodie so first let's identify

the given so the list price is equal to

800 pesos

while the percent of markdown is equal

to 40

percent so first so markdown is equal to

least price times percent of

markdown then substitute 800 plus 40

so this is equal to 280 pesos a smart

down

it means that you've been able to save

280

pesos in the process next

so we have the sale price is equal to

list price minus markdown

so the list price is equal to 800 pesos

but she's been able to save 280 pesos a

smart down

so therefore the sale price is equal to

520

pesos it means that you will pay only

520 pesos

so therefore the sale price of a hoodie

is only

520 pesos

let's have another application for

markdown so bicycle is originally sold

for five thousand six hundred pesos and

is marked down to sell

for three thousand nine hundred twenty

pesos

so determine the markdown and the

markdown rate

first so if we will determine the

original price

again so that is five thousand six

hundred pesos well the same price is

three thousand

nine hundred twenty pesos

okay so for sale price that is original

price

minus marked out so we have

3920 is equal to 5600 minus

mark 9. we do not know the markdown yet

so again if we will try to manipulate

this

so markdown is actually five thousand

six hundred

minus three thousand uh nine hundred

twenty pesos

so we come up with a markdown of one

thousand six hundred

eighty pesos next if we would like to

determine the percent of markdown so

that is equal to markdown divided by

original price

times 100 percent so we have the percent

markdown is equal to six hundred eighty

okay divided by five thousand six

hundred times one hundred percent

so the percent of markdown is equal to

thirty

percent so therefore the markdown is one

thousand six hundred eighty pesos okay

and the markdown rate is 30

so that is our lesson on markup mark on

and markdown

again this is teacher on indigenous

month do not forget to subscribe to my

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videos thank you and good day