• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

chapter 18

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › chapter 18

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • October 15, 2022 at 6:04 pm #668731
    Anonymous
    Inactive
    • Topics: 28
    • Replies: 15
    • ☆

    Sir I watched the lecture but I have few questions related to markup and margin. PLEASE correct my doubts 🙂

    1. Both markup and margin are the desired % profits that we used to calculate the selling price we want to charge to our customers?

    2. To calculate the selling price using markup approach we charge the desired markup profit % on cost to calculate the selling price because the mark-up is the gross profit expressed as a percentage of the cost?

    4. The markup is the gross profit expressed as a percentage of the cost. This means cost is 100% and markup profit is 20% then selling price is 120%.

    5. To calculate the selling price using margin approach we charge the desired margin profit % on cost to calculate the selling price because the margin is the gross profit expressed as a percentage of the selling price?

    6. The margin is the gross profit expressed as a percentage of the selling price. This means selling price is 100% and margin profit is 20% then the cost is 80%.

    7. Please explain what is the point of using either method. Some businesses use markup and other uses margin but WHY?

    October 16, 2022 at 9:02 am #668772
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    All your statements are correct.

    Some business use mark-up because they know the cost and let that determine the selling price they need to charge.

    Other businesses use margin because they decide how much customers are likely to be prepared to pay and so can calculate what they need to get the cost down to.

    As you will find out in Paper PM, there are other more sensible ways these days of deciding on what selling price to charge, but they are not examinable in Paper FA.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • osman-the-zephyr@ on MA Chapter 1 Questions Accounting for Management
  • adebusola on MA Chapter 1 Questions Accounting for Management
  • Sharith on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • Sharith on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • John Moffat on Discounted Cash Flow Further Aspects, Replacement – ACCA Financial Management (FM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in