Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 47

Write the markup formula in vertical form. Define each term. (See Objective.)
Use the basic formula for markup. Managers mark up the cost of an item before selling it. For example, assume a backpack costs REI $176.92 and that it is marked up by $53.07 before putting it up for sale. The basic markup formula that follows shows that the selling price is the sum of the cost and the markup.

In general, the markup should be large enough to cover all associated operating expenses, such as wages and rent, and to have some left over for profit. However, smaller markups are sometimes used during a storewide sale to encourage customers to shop at the store or when trying to quickly move outdated products out of the store. Look at the following related to the backpack.

Cost is the amount paid to a supplier and includes shipping costs. Any markup remaining after paying operating expenses is profit.
Markup problems often give two of the values in the basic formula ( S = C + M ) and ask you to find the unknown value, as shown in Example.