Determine Selling Price doesn't work
posted by BethLeg on Sep 25, 2006
I'm a salesperson that calculates cost + markup = selling price all the time. I bought this calculator because this function was included.
The instructions on the back say to punch in 29.24 CST (under the SEL row) and then 20 MAR (for the 20% margin or markup), which the box says should equal $36.55.
HOWEVER:
Cost: 29.24
Margin / markup: 20% = 5.848
Sell: 29.24 + 5.848 = 35.088
What gives? Obviously something is programmed wrong or the instructions are somehow wrong.
Best Solution
posted on Oct 26, 2006
ApprenticeThe computer is not broken and is correct saying what the sales price is. If you work backwards from selling price and take 20% off, then you get 29.24. The program is a generally accepted accounting principle (GAAP) that has markup not from cost, but from retail. You have been doing it wrong all these years and have been giving your customers a better deal. Play with the numbers and you will see what I mean.
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Solution #2
posted on Feb 08, 2007
A 20% "markup" is actually an increase of 25%. Clubned is correct, you are not adding 20% to your cost. A 20% markup treats your cost as a 20% reduction from your marked up price.
25% of 29.24 is 7.31
29.24 + 7.31 is 36.55
20% of 36.55 is 7.31
The calculator and instructions are correct. It's doing a financial calculation.
25% of 29.24 is 7.31
29.24 + 7.31 is 36.55
20% of 36.55 is 7.31
The calculator and instructions are correct. It's doing a financial calculation.
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