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.

Cost Price Sales PriceIn 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 understand the differences between cost price, sales price and mark-up.

Michael Celender

Comments for Cost Price, Sales Price, Mark-Up

Click here to add your own comments

Shoes online( please answer quickly)
by: Anonymous

You are buying shoes online.The selling price is $29.99. Round to the nearest penny if necessary.

A.The sales tax is 6.5%. What is the total cost?

B. The cost of shipping is 15% of the total cost.What is the total cost plus shipping?

C. If the total cost plus shipping is greater than $35 then you receive a 10% discount off the original selling price.Do you qualify? If so, what is the new total cost plus shipping?

selling price
by: roselyn

How to find the selling price for a chair if it cost the retailer $225 if the retailer has a 55% markup based on cost?

by: EmoLover

If an article is sold at a loss of 25% and was bought for $1250, find the cost price.

by: Hassan

Opening stock = 39,700.00
Purchases = 453,000.00
Sales = 551,000.00
Closing balance= ?????????
if markup 30%

To solve this problem you have to know the cost of sales formula and what mark-up percentage means. You may want to check out my lesson on Sales, Cost of Goods Sold and Gross Profit before continuing here.

The cost of goods sold formula:
Cost of Goods Sold = Opening Inventory + Purchases - Closing Inventory

Closing Inventory formula:
Closing Inventory = Opening Inventory + Purchases - Cost of Goods Sold

Closing Inventory = 39,700.00 + 453,000.00 - Cost of Goods Sold

But they don't give us cost of goods sold, only the sales.

So we use the sales figure and mark-up to get the cost of goods sold.

Cost of Goods Sold = 100/130 X Sales
= 100/130 X 551,000.00
= 423,846

Closing Inventory = 39,700.00 + 453,000.00 - Cost of Goods Sold

Closing Inventory = 39,700.00 + 453,000.00 - 423,846
= 68,854

Hope that helps understand mark-up, cost of good sold and closing inventory!

Michael Celender

Click here to add your own comments

Return to Ask a Question About This Lesson!.

Enjoying this Website?
Help Support it with a Donation


Advertise on

All the lessons on this site and much, much more...

Accounting Basics: Complete Guide

Available Now On

Get Your Degree!

Find schools and get information on the program that’s right for you.

Powered by

Subscribe to
The Student Accountant newsletter

Enter Your E-mail Address
Enter Your First Name (optional)

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you The Student Accountant.