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A bike store buys from a wholesaler for $100 and then sells then with a 39% mark up. What do they charge their bikes

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4 Answers

By definition, the markup percentage calculation is cost X markup percentage, and then add that to the original unit cost to arrive at the sales price. The markup equation or markup formula is given below in several different formats. For example, if a product costs $100, the selling price with a 25% markup would be $125.

Gross Profit Margin = Sales Price – Unit Cost = $125 – $100 = $25.

Markup Percentage = Gross Profit Margin/Unit Cost = $25/$100 = 25%.

Sales Price = Cost X Markup Percentage + Cost = $100 X 25% + $100 = $125.
 
So in your example, the store would sell the bike for a price of ($100 * 39%) + $100 or $139.
Hmm ...
 
I'm probably wrong, but I seem to remember that the markup percentage was on the sales price.
 
If so, then if p is the sales price, then 100 = (1 - 0.39) p and
 
p = 100/0.61 = $163.93
 
There is a web site, Entrepreneur, that has an article #193986 in which it states, "Even though there is no hard and fast rule for pricing merchandise, most retailers use a 50 percent markup, known in the trade as keystone. What this means, in plain language, is doubling your cost to establish the retail price. Because markup is figured as a percentage of the sales price, doubling the cost means a 50 percent markup. For example, if your cost on an item is $1, your selling price will be $2. Fifty percent of $2 is $1, which is your markup."

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