How to Calculate Markup Based on Retail Price
The key to making a profit in any business that involves selling products involves applying a markup on a product's wholesale price. For instance, if you obtain a cookie for $5, you might add a 20 percent markup and sell it for $6. The wholesale price, $5, is considered a cost, while the markup price, $6, is known as the retail price. Given the two values, you can at any time calculate the markup in either dollar value or percentage.
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Instructions
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Subtract the cost from the retail price to obtain markup in dollar value. Given a cost of $5 and a retail price of $6, subtract $5 from $6 to obtain a markup of $1. This means you added a markup of $1 to the cost, $5, to obtain a retail price of $6.
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Calculate markup percent by subtracting the cost from the retail price and then dividing the remaining value by the cost. Given a cost of $20 and a retail price of $30, subtract $20 from $30 to obtain $10. Then divide $10 by $20 to arrive at .5, or 50 percent. This means you added a 50 markup (or 50 percent of $20, which is $10) to the cost, $20, to obtain the retail price, $30.
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Obtain a retail price by multiplying the cost by the sum of the markup percent and 1. In case you need to calculate an appropriate retail price given a cost of $20 and a mark-up percentage of 50 percent, merely multiply $20 by (.5 + 1, or 1.5) to arrive at a retail price of $30.
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