The basic retailing equation states that the cost of an item is not equal to the selling price plus the markup.
TRUE or FALSE
true
Thomas company pays him 6% commission with a 1350.00 drawing account each month. if his sales last month totaled 152480.00 how much commission is owed to Thomas?
trye
False.
According to the basic retailing equation, the cost of an item is equal to the selling price minus the markup.
To understand this equation, let's break it down:
1. Selling Price: This refers to the price at which the item is sold to the customer. It is the amount the customer pays for the product.
2. Markup: Markup is the amount added to the cost price of the item to determine the selling price. It represents the profit margin the retailer wants to earn.
3. Cost Price: This is the amount the retailer paid to purchase the item from the supplier or manufacturer.
So, the equation can be written as: Cost Price = Selling Price - Markup.
To calculate the selling price, you would add the markup to the cost price: Selling Price = Cost Price + Markup.
Therefore, the statement "The basic retailing equation states that the cost of an item is not equal to the selling price plus the markup" is FALSE. The cost of an item is equal to the selling price minus the markup.