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Business Mathematics & Statistics

The document covers various marketing and financial mathematics concepts such as partial payments, markups, markdowns, costs, profits, and formulas for calculating these values. It provides examples of calculating new balances with partial payments, determining markups and costs based on selling prices, and computing markdown amounts and percentages. The concepts are demonstrated through multiple examples involving costs and selling prices of items like candles, sewing machines, and plastic jugs.

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Muhammad Shoaib
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46 views

Business Mathematics & Statistics

The document covers various marketing and financial mathematics concepts such as partial payments, markups, markdowns, costs, profits, and formulas for calculating these values. It provides examples of calculating new balances with partial payments, determining markups and costs based on selling prices, and computing markdown amounts and percentages. The concepts are demonstrated through multiple examples involving costs and selling prices of items like candles, sewing machines, and plastic jugs.

Uploaded by

Muhammad Shoaib
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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BUSINESS

MATHEMATICS
&
STATISTICS
LECTURE 15
Review Lecture 14
Financial
Mathematics Part 2
PARTIAL PAYMENTS
You owe Rs. 40,000.
Your terms were 3/10
Within 10 days you sent in a
payment of Rs. 10,000
How much is your new balance?
MARKETING
TERMS
Manufacturer Cost
The price charged to middlemen in
‘The Distribution Chain’
Distributor>Wholesaler>Retailer
Selling Price
The price charged to Consumers
by Retailers
MARKETING
Gross Sales Rs X
Less: Cost of Good Sold X
Gross Profit X
(Margin/MarkUp)
Less: Operating Expenses X
Net Profit (Income) Rs. X

Operating Expenses
Expenses the company incurs in operating the
business,e.g. rent, wages and utilities
SELLING PRICE
Selling Price (S) = Cost (C) + Markup (M)
Example
A computer’s cost
= 9,000 + 3,000 Rs.
= 12,000 Rs.

Rs. 3,000 is margin available to meet


Expenses and make a Profit
MARKUP
If the MarkUp is to be 33% on Cost then…
Selling Price (S) = Cost (C) + Markup (M)
133% = 100% + 33%
Cost is 100% the Base
% MarkUp is the Rate
Rs. MarkUp is the Portion
MARKUP
You buy candles for Rs. 10 You
plan to sell them for Rs.15
What is your Rs. markup?
What is your percent
markup on cost?
Selling price – cost= 15 – 10
= Markup = 5 Rs.
% markup = 5/10*100 = 50%
Selling Price
Fawad’s Appliances bought a sewing
machine for Rs. 1,500
To make the desired profit, he needs a
60% markup on Cost.
What is Fawad’s Rs. markup?
What is his Selling price?
Selling Price
Rs. Markup = 1,500 x 0.6
= 900 Rs.
Selling Price = 1,500 + 900
= 2,400 Rs.
Or
= 1,500 x (1+0.6)
= 1,500 x 1.6
= 2,400 Rs.
Rs. MarkUp
and Percent on Cost
Tanveer’s flower business sells floral
arrangements for Rs. 35.
To make his desired profit, Tanveer
needs a 40% markup on cost.
What do the flower arrangements cost
Tanveer?
What is the Rs. markup?
Rs. MarkUp
and Percent on Cost
S = C + M
35 = C + .40(C)
35 = 1 .40(C)
C= 35/1,4= 25 Rs.
M = 25 x 0.4
= 10 Rs.
MARKUP AGAIN
You buy candles for 2 Rs.
You plan to
sell them for 2.50 Rs
What is your Rs. markup?
What is your percent
markup on Selling Price?
MARKUP AGAIN
Rs. Markup = 2.5 – 2 = 0.5 Rs.

Percent markup on Selling


Price = (0.5/2.5) x 100
= 20%
Selling Price Again
Fawad’s Appliances bought a sewing
machine for Rs. 1,500
To make the desired profit, he needs a
60% markup on Selling price
What is Fawad’s Rs. markup?
What is his Selling price?
Selling Price
Selling Price S = 1,500 + 0.6S
S-0.6S = 1,500 Rs.
Or
0.4S= 1,500 = 3,750 Rs
Rs. Markup = 3,750 x 0.6
= 2,250 Rs.
Rs. MarkUp
and Percent on Cost
Tanveer’s flower business sells floral
arrangements for Rs. 35.
To make his desired profit, Tanveer
needs a 40% markup on selling price
What do the flower arrangements cost
Tanveer?
What is the Rs. markup?
Selling Price
Selling Price =
35 = C + 0.4x 35
35= C + 14
C = 35 – 14
= 21 Rs.
Or
C= S- 0.4 S
= 0.6 S = 0.6 x 35= 21 Rs.
Rs. Markup = 35 x 0.4 = 14 Rs.
Converting Markups
Converting 50% MU on Cost
= ? % MU on S
Formula
% Markup on Selling Price (mus) to
% Markup on Cost (muc)=
% markup on C
1 + % markup on C

mus = muc/1+muc
= 0.5/1+0.5 = 0.5/1.5
mus= 0.3333 = 33.33%
Converting Markups
Converting 33.33% MU on Sale
= ? % MU on C
Formula
% Markup on Selling Price (mus) to
% Markup on Cost (muc)=
% markup on S
1 - % markup on S

muc = mus/1-mus
= 0.3333/1 – 0.333
= 0.3333/0.6666 = 0.5
= 50%
BUSINESS
MATHEMATICS
&
STATISTICS
MARKDOWN
Formula
%Markdown = Rs. Markdown
Selling Price (original)

Store A marked down a Rs. 500 shirt to


Rs. 360
What is the Rs. Markdown
What is the %markdown?
MARKDOWN
Rs. Markdown = Old S – New S = Rs.
500 – Rs. 360 = Rs. 140 Markdown
%Markdown = Markdown
Old S

= 14
50
= 0.28
= 28 %
MARKDOWN
A variety of plastic jug was bought for
Rs. 57.75
was marked up 45%
of the Selling Price
When the jugs went out of production,
they were marked down 40%
What was the Sale Price after the 40%
markdown?
MARKDOWN
Selling price = 100
Markup = 45
Cost = 55
Original Sale price= (100/55) x 57.75
= 105
Markdown = 40 % = 0.4
Rs. Markdown = 105 x 0.4 = 42
Reduced sale= 105 - 42
= 63 Rs.
BUSINESS
MATHEMATICS
&
STATISTICS

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