11

Business
Senior High School

11
Mathematics
Senior High
School

Quarter 1 – Module 5
Markup, Markdown, and Mark-on

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Business Mathematics – Grade 11
Quarter 1 – Module 5: Differentiate Mark-on, Mark down and Mark-up
First Edition, 2020

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Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writer: Mary Jo S. Tiosayco
Roili Geluiz B. Navales

Printed in the Philippines by ________________________

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 11

Business
Mathematics
Quarter 1 – Module 5
Markup, Markdown, and Mark-on

This instructional material was collaboratively developed and

reviewed by educators from public schools. We encourage teachers and
other education stakeholders to email their feedback, comments, and
recommendations to the Department of Education at [email protected].

We value your feedback and recommendations.

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 For the learner:
Welcome to the Business Mathematics Module on Markup, Markdown, and Mark-
on!
This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning resource while being an
active learner.
This module has the following parts and corresponding icons:

What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.

What I Know This part includes an activity that aims to check

what you already know about the lesson to take.
If you get all the answers correct (100%), you
may decide to skip this module.

What’s In This is a brief drill or review to help you link the

current lesson with the previous one.

What’s New In this portion, the new lesson will be introduced

to you in various ways; a story, a song, a poem, a
problem opener, an activity or a situation.

What is It This section provides a brief discussion of the

lesson. This aims to help you discover and
understand new concepts and skills.

What’s More This comprises activities for independent practice

to solidify your understanding and skills of the
topic. You may check the answers to the
exercises using the Answer Key at the end of the
module.

What I Have Learned This includes questions or blank

sentence/paragraph to be filled in to process
what you learned from the lesson.

What I Can Do This section provides an activity which will help

you transfer your new knowledge or skill into real
life situations or concerns.

Assessment This is a task which aims to evaluate your level of

mastery in achieving the learning competency.

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 Additional Activities In this portion, another activity will be given to
you to enrich your knowledge or skill of the
lesson learned.

Answer Key This contains answers to the assessment in the

module.

What I Need to Know

This module was designed and written with you in mind. It is here to help you to
differentiate and solve problems related to Markup, Markdown and Mark-on. The scope of this
module permits it to be used in many different learning situations. The language used recognizes
the diverse vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course.

The module has three lessons, namely:

 Lesson 1 – Markup
 Lesson 2 – Markdown
 Lesson 3 – Mark-on

After going through this module, you are expected to:

 differentiate mark-on, markdown and mark-up,
 solve problems related to mark-on, markdown and mark-up, and
 obtain the selling price after a mark-on, markdown or mark-up.

What I Know

I. Solve the problems below. Show the complete process in your answer sheet.

1. Jose buys a slipper with a cost of PHP75. The rate of mark-up based on
cost is 18%. What is the selling price and the mark-up?
2. What is the cost and mark-up of a box of chalk being sold for PHP112
with a 20% mark-up based on selling price.

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 Lesson
Markup
1
What’s In

I. Determine the rate, base, and percentage in the following situations:

1. Dan borrows PhP20,000 for 2 years. The interest paid after a year is 1,000 at 5
% annual interest.

2. In a shipment of 250 parts, 50 of the parts were defective which is 20% of the
entire shipment.

3. John earned PhP500 interest from savings account paying 2% interest. He

placed PhP25,000 in the account.

4. In a department store, Kim bought a pair of shoes at PhP1,800. He saw that the
original price was PhP2,000 with a 10% discount.

5. Last week, the price of a jersey was PhP500. But after a week the price
increased by 10% with additional PhP50 to the original price.

What’s New

A clothing company line company purchases cotton at a cost of PhP60 per meter. Thirty
percent of the cost goes to their operating expenses. The goal of the business is to earn a profit
that is 25% of the cost. How much should the company’s markup on the cotton? How much should
the selling price be?

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In the problem, we have

Cost per meter of cotton: PhP60

Operating Expenses: 30% of the Cost
Profit: 25% of the Cost

Adding the expenses and profits from a business result in a markup.

So, the markup may be computed as follows,

Markup = Expenses + Profits

= ( 0.3 ) ( 60 ) + ( 0.25 ) ( 60 )
= PhP33

The company may sell the product by adding the cost and the
markup.

Selling Price = Cost + Markup

= 60 + 33
= PhP93 per meter

What is It

To cover the expense or overhead of running the business, a markup (M) is put on
products. The sum of the cost (C) and markup determines the selling price (S).

Selling Price = Cost + Markup

S =C+M

Markup can also be defined as the sum of the expenses ( E ) and profits (P).

Markup = Expense + Profits

M =E+P

Example 1:

The cost of a new pair of sunglasses is PhP4,500. The selling price is PhP8,000.
What is the rate of markup based on cost?

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 Solution:

Since S=C+ M , we have

M =S−C
¿ 8,000−4,500
¿ PhP3,500 up

Suppose we want to compute for the rate of markup, we can either base the
rate of markup on the cost or on the selling price.

When markup is expressed as a percentage of the cost or selling price, we

call it the rate of markup.

The formula for the rate of markup is based on cost denoted by M c is given by:
Markup M
M c ( % )= ( 100 )= ( 100 )
Cost C

and the formula for the rate of markup is based on selling price
denoted by M S is given by:
Markup M
M c ( % )= ( 100 )= ( 100 )
Selling Price S

Computing for the rate of markup based on cost of the given problem above, we get

M
M c= (100)
C
3,500
¿ (100)
4,500
¿ 0.7778(100)
¿ 77.78 %

Given all the formulas above, we can solve for the selling price as:

Selling Price=Cost + Expenses + Profit

S=C+ E+ P

Example 2:

A new pair of shoes costs PhP5,500. The rate of markup based on the
selling price is 15%. What are the selling price and the markup?

Solution:

M =0.15 S
S=C+ M
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 S=5,500+ 0.15 S
0.85 S 5,500
=
0.85 0.85
S=PhP 6,470.59

To compute the markup, we have

M =0.15 S
¿( 0.15)( 6,470.59)
¿ PhP 970.59

Markup can be also computed by

M =S−C
¿ S−C
¿ 6,470.59−5,500
¿ PhP 970.59

What’s More

Solve the following problems. Write your answers in your answer sheet.

1. Aling Ana would like to sell little trinkets she purchased from Bacolod Public
Market for PHP12 each. If the operating cost is set at 25% of the cost and she
would like to have a 15% profit on the cost of each item,

a. Determine the mark-up price for each trinket.

b. Help Aling Ana determine the selling price for each trinket.

What I Have Learned

 To cover the expense or overhead of running the business, a markup

(M) is put on products. The sum of the cost (C) and markup
determines the selling price (S).

Selling Price = Cost + Markup

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 S =C+M

 Markup can also be defined as the sum of the expenses ( E ) and

profits (P).

Markup = Expense + Profits

M =E+P

 Suppose we want to compute for the rate of markup, we can either

base the rate of markup on the cost or on the selling price.

When markup is expressed as a percentage of the cost or selling price, we

call it the rate of markup.

The formula for the rate of markup is based on cost denoted by M c is given by:
Markup M
M c ( % )= ( 100 )= ( 100 )
Cost C

and the formula for the rate of markup is based on selling price denoted by
M S is given by:
Markup M
M c ( % )= ( 100 )= ( 100 )
Selling Price S

 Given all the formulas above, we can solve for the selling price as:

Selling Price=Cost + Expenses + Profit

S=C+ E+ P

What I Can Do

I. Solve the problems below and write your answers in your answer sheet.

1. A jacket costs Mang Mario PHP280 and he decides to mark it up by 30% of the
selling price. Find the selling price and mark-up for the said jacket

2. A travel bag which costs PHP1350 is being sold at PHP2025. What is the rate
of mark-up based on cost?

Assessment

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I. Solve the problems below. Show the complete process in your answer sheet.

1. Julia buys a notebook with a cost of PHP45. The rate of mark-up based
on cost is 25%. Find the selling price and the mark-up.

2. Find the cost and mark-up of a box of pencils being sold for PHP135 with
a 25% mark-up based on selling price.

Additional Activities

Solve the problem below.

Peter decides to impose a mark-up of PHP5.00 on each pen he sells to his

classmates and friends. This represents a 20% mark-up based on the selling price.
Find the cost and the selling price of the pens Peter sells.

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Answer Key

Additional Activity What Can I Do

A.
1) Selling Price
A.
PhP25
1) Selling Price PhP400
Cost Mark-up PhP120
PhP20 2) 50%

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What’s More What's In What I Know
1) Mark-up PhP4.80 A. 1) Selling Price PhP88.5
2) Selling Price 1) B=PhP 20,000 Mark-up PhP13.15
PhP16.80 R=5 %
2) Mark-up PhP22.4
P=PhP 1,000
Cost PhP89.6
2) B=PhP 250
R=20 %
P=PhP 50
3) B=PhP 25,000
R=2%
P=PhP 500
4) B=PhP 2,000
R=60 %
P=PhP 1,200
5) B=PhP 500
R=10 %
P=PhP 50

Lesson
Markdown
2

What I Know

I. Solve the problems below. Show the complete process in your answer sheet.

1. Nike Store sells a pair of shoes for PhP5 300. If they wish to lower its
price to PhP2 900, what rate of markdown should they offer?

2. During a Clearance Sale, a board game regularly priced at PHP8500 was

sold at 55% discount. The cost of the board game is PHP3450 and
expenses are 14% of the regular selling price. How much was the sale
price of the board game?
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 What’s In

I. Calculate the percentages.

1) 20% of 50
2) 81% of 78
3) 350% of 80
4) 22% of 110
5) 300% of 50

II. Perform the indicated operations.

1) 56.6 x 12
2) 234.45 – 0.325
3) 798 ÷ 1.7
4) 2.4 x 3.67
5) 155.38 ÷ 340

What’s New

Business owners reduce the price of their products to match the competitor’s price
adjustments. During this time, the sale of the different products is coming in slow. Owners
may need to sell it at a DISCOUNTED PRICE or what is commonly known as the SALE
PRICE.
MARKDOWN = ORIGINAL PRICE – SELLING PRICE

Mark-downs commonly happen when the mall decides to sell their items at cut down
prices to clear their warehouse collection. For instance, some items which usually sold for
PHP150 are sold at 50% off during mall sales and so the mark-down price is set at PHP75.
There other reasons why a mark-down is sometimes thought of as an option for a
business owner are as follows:
 the item is a perishable item and it is best to dispose of it
sooner than simply throw it away
 the item has become dirty or worn out, or possibly out of style
 competition forces the marking down of an item

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 Remember that rates of mark-downs are always computed based on the selling
price.

What is It

A markdown may be done temporarily or permanently. A temporary

markdown is a reduction in the selling price of an item to encourage consumers to
increase their demand on a particular product. On the other hand, permanent
markdown is implemented by companies to remove a “poor-sales” product from
their inventory. In general, the purpose of markdown is either to generate sales or

to clear inventory. The following formulas relate the selling price ( S),, original price
( Po ), and markdown rate ( M d ):

S=P o (1−M d )

S
Po =
1−M d

S
M d =1−
Po

Example 1:

After Christmas season, Sharon is considering to reduce the price of a gift

wrapper. Her original price is PhP30.

a. If she wants to decrease its price to PhP21, what is the

markdown rate?
b. Suppose Sharon wishes to calculate the wrapper price
based on the markdown rate of just 20%, how much
would her gift wrapper cost?

Solution:

S
M d =1−
Po
21
¿ 1−
30
¿ 0.3
15
 ¿ 30 %

a. S=P o (1−M d )
¿ 30(1−0.2)
¿ PhP24

Example 2:

Find the markdown rate if the DVD was originally priced at PhP290.00 and
was sold at PhP240.00

Solution:

Markdown=Original Price−Selling Price

¿ 290−240
¿ 250

Markdown
Markdown rate= x 100 %
Selling Price
50
¿ x 100 %
240

¿ 21 %

What’s More

Solve the following problems. Write your answers in your answer sheet.

1. Carlo was able to buy a pair of shoes regularly priced at

PHP3500 for only PHP2100.

a. What was the amount of the mark-down?

b. What was the rate of the mark-down?

2. Dina went to SM City Bacolod and bought 3 items for

H&M’s 25% markdown sale. She bought a scarf with the
original price of PhP450, also a jacket pullover costs
PhP1,200, and a pair of boots was originally priced at
PhP2,500. Find the selling price of each purchased
items.

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What I Have Learned

 A reduction in the regular selling price of a

particular product occurs in response to market
conditions is called markdown.
 MARKDOWN = ORIGINAL PRICE – SELLING PRICE

 Mark-down based on its selling price:

Markdown
Markdown rate= x 100 %
Selling Price

 In general, the purpose of markdown is either to

generate sales or to clear inventory. The following
formulas relate the selling price ( S),, original price
( Po ), and markdown rate ( M d ):

S=P o (1−M d )

S
Po =
1−M d

S
M d =1−
Po

What I Can Do

I. Solve the problem below and write your answer in your answer
sheet.

A sports drink was offered for sale at PhP91.50 at

the West Store. At the East Store, the regular price of a
similar drink was PhP114.50. What rate of markdown
should East Store have to offer to sell the drink at the
same price as West Store?

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Assessment

I. Solve the problems below. Show the complete process in your

answer sheet.

1. An optical shop sells a pair of contact lenses for

PhP1,200. If they wish to lower its price to PhP900, what
rate of markdown should they offer?
2. Wilcel Home had a grand sale last week. With all their
items priced at PhP88, how much would the discounted
price be if their items were all 30% off?

Additional Activities

Solve the problem below.

An old laptop was marked down by 43% and sold for

PhP20,000. How much was the original value of the
laptop?

Answer Key

Additional Activity What Can I Do

2) PhP28,600

1) 25.14%

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What’s More What's In What I Know
1) Markdown 1) 45.28%
PhP1,400 I. 2) PhP3,825
1) 10
Rate 40% 2) 63.18
3) 280
4) 24.2
2) Scarf PhP337.50
5) 150
Jacket Pullover
PhP900 II.
Boots PhP1,875 1) 679.2
2) 234.125
3) 469.41
4) 8.808
5) 0.457

Lesson
Mark-on
3

What I Know

Solve the problem below.

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 Find the regular selling price and the cost price of memorabilia
items being sold for PHP500 if the mark-up is set at a rate of 25% of
the cost price with an approved 15% mark-on rate based on the cost
price included because of a special event.

What’s In

I. Solve the problem below.

1) A store uses a 40% markup on cost. Find the cost of a doormat

that sells PhP63.00.

What’s New

Sometimes, especially during holidays (e.g. Christmas,

Valentine’s Day, Mother’s Day, etc.) the price of some goods
like flowers, chocolates, and cakes increase fairly weeks prior
to the said holiday. Some businesses will want to take
advantage of this peak season and thus, increase the prices
already pegged for their commodities. This is what we call the
MARK-ON.

MARK-ON = PEAK SELLING PRICE – REGULAR SELLING

PRICE
MO = PS – S
where MO = Mark-On
PS = Peak Selling Price

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 S = Regular Selling Price

What is It

Example:

Manang Crising observes that market goers prefer to buy fish from her
because there is an undersupply of meat in the market this season. She
then decides to increase the price of galunggong by PHP10 per kilo. If the
cost of galunggong is PHP90 per kilo with a 35% mark-up, what is its new
selling price with the additional increase of PHP10? By how much is the rate
of mark-up based on cost increased by adding PHP10 to the regular selling
price of the galunggong?

Solution:

MU = 0.35  S
= 0.35  90
= PHP31.50

Selling Price before increase:

S = C + MU
= 90 + 31.50
= PHP121.50

Selling Price after increase:

PS = S + MO
= 121.50 + 10
= PHP131.50

Combined Rate of Mark-up and Mark-on =

31.50+10
=0.4611 = 46.11%
90
46.11 – 35 = 11.11%

∴The mark-up is increased by 11.11% by the additional

mark-on of
PhP10 imposed by Manang Crising.

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What’s More

Solve the problem below. Write your answers in your answer sheet.

Yvette’s Flower Shop imposes a 45% mark-up on flowers

delivered to them for sale. During All Saint’s Day, however, an
additional mark-on of 25% of the regular selling price is added on.
Determine the unit price of 300 roses worth PHP15000 delivered to
Yvette’s Flower Shop during All Saint’s Day. How much is the selling
price of each rose during All Saint’s Day at this flower shop?

What I Have Learned

 When the price of a retail product increase fairly soon

after another increase is called mark-on.

 MARK-ON = PEAK SELLING PRICE –

REGULAR SELLING PRICE
MO = PS – S
where MO = Mark-On
PS = Peak Selling Price
S = Regular Selling Price

What I Can Do

I. Solve the problem below and write your answer in your answer
sheet.
Larry sells facemask. He imposes a 30% mark-up on each
facemask which costs PhP12.00. However, his mother decided
to have an additional mark-on of 15% of the regular selling price
next week because it is in demand. How much is the selling price
of each facemask next week?

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Assessment

I. Solve the problem below. Show the complete process in your

answer sheet.

Larry owns a flower shop in Hinigaran. He knows that a lot of

male customers will buy roses few days before Valentine’s Day. The cost
of a bouquet of roses is PhP80. A week before Valentine’s Day, the rate
of markup based on the selling price of the bouquet is 10%. Manuel
knew that even if he increases the selling price of bouquet of roses,
people will still buy it. So he decided to put a mark-on of 5 % to its selling
price.

a) How much is the actual selling price?

b) How much is the markup?
c) How much is the additional mark-on?
d) How much is the new selling price after additional
mark-on?

Additional Activities

Solve the problem below.

1. What is the cost price of a shirt being sold for PHP900

if the mark-up is set at a rate of 15% of the cost price with
an approved 8% mark-on rate based on the cost price
included because of a special event?

Answer Key

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 Additional Activity What Can I Do
1.) PhP731.71
1.) PhP17.94

What’s More What's In What I Know

1) PhP90.65 1) Cost price
1.) PhP45 PhP357.14
Regular Selling
Price PhP446.43

References
Lopez, B.R., Martin-Lundag, L, Dagal, K.A., Garces, I.J., 2016,Business Mathematics Textbook,
Most Essential Learning Competencies (MELC) for Business Mathematics

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