# Cost Price, Sales Price, Mark-Up

**Q: How do you find the cost price if the sales are $216,000 and the mark-up is 50%?**

**"Mark-up" literally means the amount you "mark up" the cost by (the amount you increase it by) to get to the selling price. The percentage (50%) is based on the cost - i.e. the profit (mark-up) is 50% of the cost price.**

A:

A:

In an equation this simplifies to:

Mark-up (profit) / cost = 50/100 (50% of cost)

Selling price = cost + profit (mark-up)

Selling price = 100%+50%

Selling price = 150%

Therefore cost = 100/150 X $216,000 = $144,000

Hope that helps you understand the differences between cost price, sales price and mark-up.

Check out the comments below for more questions about this topic.

**Related tutorials:**

- What is Inventory?
- Sales, Cost of Goods Sold and Gross Profit
- Perpetual and Periodic Inventory Systems
- FIFO, LIFO and the Weighted Average Cost Method

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