Page 162 - 5.2 i. Manac Costing ITC Summarised Notes

DECISION MAKING

Mark up vs. Margin

Mark up - This is the profit % on cost.

Example: The cost of product A is R600. Calculate the selling price if the mark up is 25%
on cost.

COST 100%

MU 25%

SP 125%

R600 x 125%/100% = R750

Margin - This is the profit % on sales.

Example: The cost of product A is R600. Calculate the selling price if the margin is 25%
on sales.

SP 100%

MARGIN (25%)
COST 75%

R600x 100%/75% = R800
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