Did you know?
Did you know that the markup rate is an important concept in business? It measures how much a product's price is increased from its original cost. For example, at Pete's Deli, their corned beef is sold at a price of $2.55 per pound, while they purchase it from their wholesaler at $1.95 per pound. The markup rate based on A) cost is calculated by subtracting the cost from the selling price ($2.55 - $1.95), resulting in a markup of $0.60 per pound. To find the markup rate based on B) selling price, you would divide the markup ($0.60) by the selling price ($2.55). This gives a markup rate of approximately 23.5%. Understanding markup rates helps businesses determine their profit margin and pricing strategies.
