Hi, I hope u r doing well. 1. Calculating the cost of sales using a Mark-up we use the formula Cost of sales = Sales x 100 ------------------- 100 + Markup percentage. Cost of sales = sales(21 017+3360000) x 100 -------------------------------- 220 (selling price) * A mark up is the amount added to the cost of a product to determine it's selling price. 100 represent the total cost (100% of the cost) 120 is the mark provided in additional notes = 220 (Selling price) 100 in the numerator : attempts to reverse the impact of the percentage and find the base cost 220 in the Denominator : Dividing by 220 adjusts this value back from the 220% (selling price) to the original 100% (cost price). * The business uses a mark-up of 120% on the cost of bicycles. This means the selling price is 220% of the cost price (100% cost + 120% mark-up). Please let me know if you need more clarity, and I can provide an example.
Why did we say 100 over 220
Hi, I hope u r doing well.
1. Calculating the cost of sales using a Mark-up we use the formula
Cost of sales = Sales x 100
-------------------
100 + Markup percentage.
Cost of sales = sales(21 017+3360000) x 100
--------------------------------
220 (selling price)
* A mark up is the amount added to the cost of a product to determine it's selling price.
100 represent the total cost (100% of the cost)
120 is the mark provided in additional notes
= 220 (Selling price)
100 in the numerator : attempts to reverse the impact of the percentage and find the base cost
220 in the Denominator : Dividing by 220 adjusts this value back from the 220% (selling price) to the original 100% (cost price).
* The business uses a mark-up of 120% on the cost of bicycles. This means the selling price is 220% of the cost price (100% cost + 120% mark-up).
Please let me know if you need more clarity, and I can provide an example.
Thank you 🙏