Quandaries and Queries


I am attempting to determine the Retail price of an item that costs me 11.00. Our company wants to sell it at a markup of 40%. I calculated this two ways, first the way I thought it should be done. Second, the way the calculator does it (and my accountant).

  1. Cost + Cost*(percentmarkup/100)= retail price
    11.00 + 11.00*.40 = retail price
    11.00 + 4.40 = 15.40 retail price
  2. Using the calculators Mark Up key the answer is 18.33. Or 7.33 more than the cost or 67%.

I am confused by this Mark Up key and how it calculates. I used a cost of $10.00 and marked it up 50%. I thought it should equal $15.00 but the calculator says $20.00? This seems to be 100% markup, yes?

Can you explain the difference between the way I did it and the way a Business calculator does it?




Hi Nick,

Percentages can be confusing partly because, in day-to-day language, we use the term percentage without saying percentage of what. That is precisely the problem here. You are calculating a percentage of what it cost you and your calculator is finding a percentage of what your customer will pay.

The item costs you $11.00 and your calculations will mark it up 40% of the $11.00.

Your calculator is looking at this from your customer's point of view. If your customer sees a ticket price of $18.33 on the item and knows you paid $11.00 and marked it up $7.33, then he calculates $7.33 as 40% of $18.33. Thus your cost of $11.00 is 60% of $18.33.

Your calculator finds the ticket price of $18.33 as follows.

60% of the ticket price is $11.00 and thus
0.60 ticket price = $11.00, and hence
ticket price = $11.00/0.6 = $18.33

I hope this helps,


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