Ch 7 Mathematics of Selling - PowerPoint PPT Presentation

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Ch 7 Mathematics of Selling

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Is the amount paid to the manufacturer or supplier after trade and cash ... the markup and the selling price for a Casio watch if the cost is $17.50 and the ... – PowerPoint PPT presentation

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Title: Ch 7 Mathematics of Selling


1
Ch 7 Mathematics of Selling
  • Markup Based on Cost

2
Objective 1
  • Recognize Terms in Selling

3
Terms Used In Selling
  • Cost
  • Is the amount paid to the manufacturer or
    supplier after trade and cash discounts have been
    taken.
  • Shipping and Insurance charges are included in
    cost.

4
Terms Used In Selling
  • Selling Price
  • Is the price at which merchandise offered for
    sale to the public.

5
Terms Used In Selling
  • Markup (Margin) (Gross Profit)
  • Is the difference between the cost and the
    selling price.

6
Terms Used In Selling
  • Operating Expenses
  • The expenses incurred while running a business.
  • Wages Salaries
  • Rent for Building and Equipment
  • Utilities
  • Insurance
  • Advertising
  • Postage (see page 260)

7
Terms Used In Selling
  • Net Profit
  • Is the amount (if any) remaining for the business
    after operating expenses and the cost of goods
    have been paid.

8
Terms Used In Selling
  • Markup
  • Based on Cost
  • Manufacturers (also some wholesalers, retailers)
  • Based on Selling Price
  • Retailers

9
Objective 2
  • Markup Formula

10
Basic Markup Formula
Cost Markup Selling Price
  • Cost Markup Selling Price

Cost
Operating Expenses
Net Profit
11
Solving Markup Problems
C M S
12
Objective 3 4
  • Solve Markup Problems

13
Compute Markup Based on Cost 1 of 2
  • Compute the percent markup on cost
  • Item Cost 15
  • Selling Price 20
  • Markup _____

100 ? ?
C M S
15 20
14
Compute Markup Based on Cost 2 of 2
  • Compute the percent markup on cost
  • Item Cost 45
  • Selling Price 87.50
  • Markup _____

C M S
15
Use Markup Rate to Set Selling Price 1 of 3
  • Determine the markup and the selling price for a
    Casio watch if the cost is 17.50 and the markup
    rate is 20.

C M S
16
Use Markup Rate to Set Selling Price 2 of 3
  • 19, page 268
  • The cost of some socket-wrench sets from Taiwan
    is 10.36 per set. Harbor Tool decides to use a
    markup of 25 on cost. Find the selling price of
    the socket wrench set.

C M S
17
Use Markup Rate to Set Selling Price 3 of 3
  • 21, page 268
  • Olympic Sports purchases Spalding Basketball
    systems at a cost of 180 each. If the companys
    operating expenses are 16 of cost, and a net
    profit of 7 of cost is desired, find the selling
    price of one basketball system.

C M S
Cost
Operating Expenses
Net Profit
18
Determine Cost and Selling Price 1 of 2
  • Laptop computer has a markup of 45, which is 32
    based on cost.
  • Compute the cost and selling price of the laptop.

C M S
19
Determine Cost and Selling Price 2 of 2
  • 12, Page 267
  • Cost _____
  • Markup 54.38
  • Markup on Cost 50
  • Selling Price _____

C M S
20
Textbook Problems
  • 18, 22, 23, 25 on page 268
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