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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › mark-up
Hello Sir.
Can you please help me clarify this point.
I have a question about proft mark-up and margin.
If a company uses profit MARK-UP to calculate selling price, how we calculate selling price??? by adding mark-up % to total production cost or by adding mark-up % to total cost (which includes non-production overheads as well).
If a company uses profit MARGIN to calculate selling price, how we calculate selling price??? by adding margin % to total production cost or by adding margin % to total cost (which includes non-production overheads as well).
Thank you vey much.
Mark-up is profit calculated as a % of cost. Margin is profit calculated as a % of selling price.
As far as cost is concerned, it is production cost (unless, obviously, the question says otherwise).
Thank you very much for your help, Sir
You are welcome 🙂