Page 14 - LESSON 2: DISCOUNTS AND COMMISSIONS

Many retailers, however, express mark-on as a percent or fraction of the cost of goods
to be sold. This mark-on varies from one store to another, product to product. Thus, Mrs.

Marquez may decide to apply a mark-on of 30% on clothes, or 35% on cosmetics, etc.

Example 1:
One line of women's bra cost Mrs. Marquez ₱50.00 each. At what price should each

dress be marked for sale if she wants to realize a 30% mark-on based on the cost?

Given: ₱50.00 = cost of bra
30% = mark-on

Solution:
1. Since the mark-on is 30% of the cost of ₱50.00, the mark-on is computed by

multiplying ₱50.00 by 30%. Thus,

= ×

= ₱50.00 .30

= ₱15.00

2. The selling price is obtained by adding the mark-on to the cost of the product.

= + −
= ₱50.00 + ₱15.00
= ₱65.00
We must realize, however, that the costs of transportation, such as freight and trucking

charges, and other operating expenses are part of the costs of the product because these are

considered essential parts of the cost of the goods.
Mark-on Based on Selling Price

We mentioned before that many retailers express mark-on as a percent or fraction of
the cost of goods to be sold. Other retailers, however, prefer to state mark-on as a percent or

fraction of selling price. What are the differences between the two practices? Let us illustrate
by the following example.

If, for example, a retailer buys a commodity for ₱80.00 and sells them for ₱100.00, his
mark-on must be stated as 25% over cost (₱100 − ₱80 = ₱20 → ₱20 ÷ ₱80 = .25 or

25%). If he states the same mark-on (i.e. ₱20) as a percent of the selling price, the mark-on

rate is only 20%. (₱20; ₱20 ÷ ₱100 = 20 or 20%)

2 | P a g e BUSINESS MATHEMATICS: MODULE 2