Mark up and Margin

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Can anyone explain mark up and margin and is there a formula I can remember.<BR><BR>Thanks<BR><BR>Jen<BR><BR>jennywilliamsonuk@yahoo.com

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Mark up and Margin

    It's simple as this:<BR><BR>In Mark up the cost of sales always 100%, so if they told you that the profit on mark up is 25% you can apply this formula<BR><BR>Sales 100%+25% = 125%<BR><BR>Cost of sales 100%<BR><BR>Gross Profit 25%<BR> <BR>for example if you knew that the profit on good sold by 5000 (25% mark up)<BR><BR>5000 x 25%/ 125%= 1000<BR><BR><BR>In margin the Sales always 100%<BR>we can apply same example <BR><BR>Sales 100%<BR><BR><BR>Cost of Sales 100%-25%= 75%<BR><BR><BR>Gross Profit 25%<BR><BR>5000x25%/100%= 1250<BR><BR>I hope this help<BR><BR>best wishes<BR><BR>hussain alasfoor

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