Markup percentage is also known as the increase in the original selling price of a product and markups are used in either retail or wholesale business.
The original cost of a table is 1000 and it is sold with 20% of gross margin in the market. Calculate the mark up percentage of a table.
Original Cost (C) = 1000 Gross Margin (G) = 20% = 0.2
Revenue cost, gross profit and mark up percentage
| Revenue (R) | = C / (1-G) |
| = 1000 / (1-0.2) | |
| = 1000 / 0.8 | |
| Revenue (R) | = 1250 |
| Gross Profit (P) | = R - C (or) R×G |
| = 1250 - 1000 | |
| Gross Profit (P) | = 250 |
| MarkUp (M) | = P/C |
| = (250/1000) × 100 | |
| = 0.25 × 100 | |
| MarkUp (M) | = 25 % |
MarkUp / Discount Price is 25 %
