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

Exercise 16

Find the missing quantities by first computing the markup on one base and then computing the markup on the other. Round rates to the nearest tenth of a percent and dollar amounts to the nearest cent. (See Example.)
Determining Equivalent Markups
Benito's Fishing Lures, Inc., makes and sells a lot of fishing lures and struggles to keep costs very low. One particular lure has a cost of $2.10 and is sold to distributors and wholesalers for $3.20. Find the percent markup on cost and also the percent markup on selling price.

SOLUTION
First set up the problem using cost as the base , or 100%.

Next, set up the table with selling price as the base , or 100,. The markup of $1.10 remains the same and can be entered in the table.

This example shows that a 52.4% markup on cost results in the same dollar markup as a 34.4% markup on selling price. In other words, a 52.4% markup on cost is equivalent to a 34.4% markup on selling price.