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I’m probably having a mental freeze and am struggling with what should be a simple concept.
I would have thought that a mark-up would be a percentage of cost, for example a 20% mark-up on something costing £1,000, would mean a profit of £200 and a selling price of £1,200. The information I found online seems to back this.
The BPP F7 text, however, would work out the above example as cost of £1,000 x 20/120 = profit of £167 and a selling price of £1,167.
Is the BPP text incorrect, or am I having mental breakdown??
Any help would be appreciated.
Mark up of 20 % means cost is 100% and hence selling price is 120%. But then the calculation goes as follows:
selling price =120/100*1000=1200
and profit is 20% of 1000=200
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