Mark up - mind blank!
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LA2018
Registered Posts: 19
Hey!
So am revising for my sypnotic and I have total brain freeze with this question. I’m in a pickle and not sure where to start! X
So am revising for my sypnotic and I have total brain freeze with this question. I’m in a pickle and not sure where to start! X
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The mark up means that what ever is spent on the costs is increased by the amount given before being sold. e.g buy something for £100 you sell it for £125 if the mark up is 25%.
This means the profit will by 25% the cost of sales.
CoS therefore equals 16250/25 *100 = £65,000
Sales is CoS*1.25 = £81,250
For closing inventory you take the opening add purchases and subtracts the cost of goods sold.
5,550+74,350-65,000= £14,900
I hope this helps.
N.B If it talks about profit margin then the profit is that % of sales. The margin on the example at the top is 25/125*100= 20%AAT Level 4, MAAT
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This is perfect thank you ?0
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