Business Math

Question

What does a 40% markup on selling price, which is 66.7% markup on cost, result in the same Dollar markup?

Answer 1

Hello, thank you for taking the time to post your question!

It’s based on this underlying relationship between the variables

Markup on Selling Price = (Markup on Cost) / (1 + Markup on Cost)

Markup on Cost = (Markup on Selling Price) / (1 – Markup on Selling Price)

So what that means is that a 66.7% markup on cost would be mathematically equivalent to a 40% markup on selling price … it’s the same underlying relationship that you’re using

I hope that helps get you moving in the right direction! Feel free to reach out if you have any additional questions beyond that :)

Answer 2

It appears you are referring to this...

 

Say you are selling a TV for $100.

The TV costed you $60.

 

The percents are different depending on whether you are calculating from the point of view of the selling price or the cost.

 

40% of the selling price is 40.

66.7% of the cost is 40.

Although both are the same dollar amount, the percent is different.

 

I believe you would say that the cost is 40% lower than the selling price. The selling price is a 66.7% mark up from the cost.