How to Calculate Markup Percentage?

Markup Percentage - Definition, Formula, Example

Definition:

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.

Formula:

R = C / (1-G) P = R - C (or) R×G M = P/C
Where,
C = Original Cost G = Gross Margin R = Revenue P = Gross Profit M = MarkUp

Example :

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.

Given :

Original Cost (C) = 1000 Gross Margin (G) = 20% = 0.2

To Find :

Revenue cost, gross profit and mark up percentage

Solution :

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 %

Result :

MarkUp / Discount Price is 25 %

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