Question

Blue jeans, Inc. sells jeans that cost $15.99 for a selling price of $42.95. What is the percent of markup based on cost? (Round to nearest hundredth percent.)

Answer 1

You do have to be careful with this question. There are two popular ways to define markup. You must be SURE you know which one you want.

Markup: 42.95 - 15.99 = 26.96

#1 % of the Wholesale Price. Q: How does my profit compare to my cost?

% Markup: 26.96 / 15.99 = 168.61% <== A value so calculated can be very large.

#2 % of the Retail Price. Q: How much of my revenue is markup?

% Markup: 26.96 / 42.95 = 62.77% <== A value so calculated MUST be less than unity (1.00).

Did the problem statement give you enough information to choose the right one?