Page 35 - Manac Costing Test 2 class slides - 2. Decision Making
P. 35

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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