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Could you please explain why 14,950 x 100/115. I didn’t get the phrase “mark up on cost at 15%” yet.
At the first time I’d thought 15% is the profit, so I decided 14,950×85% but it’s wrong.A 15% mark-up on cost means that the profit is 15% of the cost.
So for every $100 cost, there is a profit of $15 and therefore the selling price is $115.
Putting it the other way round, for every $115 selling price, the cost is $100.Therefore for selling price of $14,950, the cost must be 100/115 x $14950.
I do suggest that you watch my free lectures on mark-ups and margins. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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