



 
We have two responses for you Lisa, The difference in your calculations comes from not clearly specifying precisely what you mean by 30%. You have calculated 30% of the cost. When the cost is $5.00 you add 0.30 × $5.00 = $1.50 to obtain a selling price of $5.00 + $1.50 = $6.50. This is what I would call a markup of 30%. Your boss has calculated the markup as 30% of the selling price. To say this another way the $5.00 cost is 70% of the selling price. That is
Thus selling price = $5.00/0.70 = $7.14. This is what I would call a margin of 30%. So it comes down to precisely what the markup is. Is it 30% of the cost or 30% of the selling price? Penny
Lisa, Let's say you want to mark up the product by 30%. Doing it your way, the new price is (old price) + 0.30x(old price) = 1.30 x old price. Let's try it with some numbers. Suppose the old price is $100. Then according to your calculation, the new price is 1.30x$100 = $130. Maybe you had best talk to your boss to figure out which method he uses, and what he would prefer done in the store.  


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