mark up

Hi, I had question in my last CTRM exam similar to the below, can someone please give me an idea on how to approach to this question , thanks in advance !
G.
“Product B it’s sold at 20% mark up on cost and make a profit of 45£ per units. Calculate the profit per units, assuming the cost price remaining unchanged but is now sell at 40% margin..”

Comments

  • PeterC
    PeterC Registered, Tutor Posts: 226
    20% Markup:
    Profit = COST x 20%
    £45 = COST x 20%
    COST = £45/0.2 = £225

    40% Margin:
    SELLING PRICE X 40% = Profit
    SELLING PRICE x 60% = COST = £225
    SELLING PRICE = £225/0.6 = £375

    Profit = SELLING PRICE - COST PRICE = £375 - £225 = £150
    or
    Profit = SELLING PRICE x 40% = £375 x 40% = £150

  • GDIPIETRO
    GDIPIETRO Registered Posts: 7
    thanks!!! ;)
  • PeterC
    PeterC Registered, Tutor Posts: 226
    You're welcome
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