Markon as a Percent of Cost/Percent of Selling Price:
In many retailing considerations, the determination of the markon,
M, is either (a) a percent of the
cost, C, or (b) a percent of
the selling price, S. The
fundamental relationship between these numerical values is:
The text gives one
approach to solutions of problems for this topic. Another approach
could be the use of complements as previously done for discounts,
chain discounts and decrease in general. A third, and perhaps,
best approach is an algebraic approach. This is the method used
herein and is illustrated with the following example. Note that
the format involves tabulation of the given information from
C, M, and S and substituted into the fundamental formula S = C +
M. Then one just does the algebra dictated by the equation.
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| Example 1: |
C = $25 |
|
M = 20% of
Cost = .20 * 25 = 5 |
|
S = ? |
|
S = C + M |
|
Substitution
in S = C + M gives: |
|
S = 25 + 5 |
|
S = 30 |
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Example 2: |
C
= 27 |
|
M = 10% of
Selling Price = .10S |
|
S = ? |
|
S = C + M |
|
Substitution
in S = C + M gives: |
|
S = 27 + .10S |
|
S - .10S = 27 |
|
.90S = 27 |
|
S =
= 30 |
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Example 3: |
C
= ? |
|
M
= 20% of Cost = .20C |
|
S
= 30 |
|
S
= C + M |
|
Substitution
in S = C + M |
|
30
= C + .20C |
|
30
= 1.20C |
|
C
=
 |
|
C
= 25 |
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Example 4: |
C
= ? |
|
M = 10% of
Selling Price = .10 * 30 = 3 |
|
S = 30 |
|
S = C + M |
|
Substitution
in S = C + M |
|
30 = C + 3 |
|
C = 30 - 3 |
|
C = 27 |
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Example 5: |
C
= 25 |
|
R
= ? % of Cost |
|
S
= 30 |
|
S
= C + M |
|
Substitution
in S = C + M gives: |
|
30
= 25 + M |
|
M
= 30 - 25 = 5 |
|
M
as % of Cost =
= .20 = 20% |
