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Lesson 7.6: Markup and Discount

Lesson 7.6: Markup and Discount. Terminology. Cost - The price retailers pay to a manufacturer. Selling Price - The price retailers charge customers. Operating expenses or overhead - The regular expenses of doing business such as rent, wages, utilities, etc.

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Lesson 7.6: Markup and Discount

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  1. Lesson 7.6: Markup and Discount

  2. Terminology Cost - The price retailers pay to a manufacturer Selling Price - The price retailers charge customers Operating expenses or overhead - The regular expenses of doing business such as rent, wages, utilities, etc. Markup, margin, or gross profit - The difference between the cost of bringing the goods into the store and the selling price Net profit or net income - The profit remaining after subtracting the cost of bringing the goods into the store and the operating expenses

  3. Markup and Discount • Markup and Discount are like tax, commission, and tip questions. • You can… • Change the percent to a decimal and multiply. • Write a proportion like percent problems

  4. Basic Selling Price Formula Selling price (S) = Cost (C) + Markup (M) $1,200 Computer $900 - Price paid to bring computer into store $300 - Dollars to cover expenses and profit

  5. Markup A retail store buys items at wholesale prices. To cover expenses and make a profit, the sells items at higher retail prices. The extra amount is called the markup. Discount When an item is on sale, the store is selling the item for less, so this is called discount. Markup vs. Discount

  6. Finding the amount of markup. A store buys a shirt at a wholesale price of $13.50 and sells the shirt for $24.95. How much was it marked up? Finding the percent of markup. What is the percent of markup for the shirt in the first problem? Markup $11.45 84.8% or 85%

  7. Markup 1) A store buys a pair of shoes at a wholesale price of $37.50 and sells them for $50. What is the amount of markup? 2) What is the percent of markup for the pair of shoes in problem 1? 3) Find the cost after markup: $15 movie, 20% markup

  8. Find the amount of discount A $36 book is on sale for $27. What is the amount of discount? Find the percent of discount What is the percent of discount for the book in the problem before? Discount $9.00 25%

  9. Discount • A $90 coat is on sale for $76.50. What is the amount of discount? • What is the percent of discount for the coat in problem 1? • Find the cost after discount: $85 radio, 10% discount.

  10. Shopping Activity • It is time to shop! • You have $1000 dollars to spend, no more! • You need to shop at least at 6 stores, where you can buy at least one item. Be sure to have at least 2 markups and 2 discounts. • Find the cost after the markup or discount.

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