



 
Hi Tammy. Here's where your boss is getting this value: She is saying that 30% of the selling price is her markup. That means, for example, that 30% of $1186.90 is the markup (0.30 x $1186.90 = $356.07). If you add that to the original cost of $830, you get $1186.07, which is very close to the selling price (the difference is due to rounding). So it is a matter of perspective. 30% of the final price is the amount you add to the original cost. Now take a look from this perspective: If 30% of the final cost is the markup, then the original cost is 70% of the final price, right? But when you have the original cost and need to know the final price, then you have a figure that is 70% of the final price, but you want the 100% price. So you multiply by 100%/70% which is 10/7 which is 1.43 ! Mathematically, we say that if C is the original cost and P is the final price, then 70% x P = 100% x C If you have the final price P and want the original cost C, then you solve this for C: C = P x 70% / 100% = P x 0.7 But if you have the original cost C and want to know what final price you should sell for in order to get the 30% markup, then you solve for P instead: P = C x 100% / 70% = C x 1.43 There is some debate over whether or not this should be called "markup" or "margin" or something else. Do a search on the word "markup" in your dictionary or on our site to find out more about the words and how they are used in different situations. Cheers,
 


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