Help please with figuring markup - for Marketing CLEP exam

[wfauchier]

Hi Michelle,

I'm taking the Marketing CLEP in a couple of weeks too and have myself just started thinking about markup.

Snazzlefrag has great examples, and does some calculating in his head, which is good, seeing that the problems (and hopefully the test problems) are simple.

I broke Snazzlefrag's problems down step by step for myself and for you, to have a system in case you can't jump a step or two in your head. So--I'll quote Snazzlefrag's problems and then finally your original one, and add my own step by step method.

Question:
If the wholesale price for a product is $100, and the item sells at retail for $150, what is the retail markup percentage?

Answer:
The amount of markup was $50.
What percent of $100 is $50?
$50 equals 50% of $100.
So the markup percentage = 50%

[INDENT][INDENT]Step by step:
150 - 100 = 50 = markup
100x = 50
x = 50/100 = .50 = 50% Retail markup percentage[/INDENT][/INDENT]

Question:
If the retail price for a product is $1500 and the markup was 50%. What was the wholesale price of the product?

Answer: (X + 50% = $1500)
What amount, when you add 50% to it, will equal $1500?
$1000 + 50% = $1000....$1000 + $500 = $1500.
So the wholesale price = $1000

[INDENT]Step by step: (50% = 50/100 = .50 = .5)
x + .5x = 1500 = Retail price
1.5x = 1500
x = 1500/1.5
x = 1000 = Wholesale price[/INDENT]

Question:
If a product originally selling for $35.00 is marked down by 10%, what is the discounted retail selling price?

Answer:
What is 10% of $35?
10% of $35 = $3.50
$35 - $3.50 = $31.50
So the discounted retail selling price = $31.50

[INDENT]Step by step: (10% = 10/100 = .10 = .1)
35 - .1 x 35 = x
35 – 3.5 = x
31.50 = x = Discounted retail selling price[/INDENT]

Your original problem:
A new table has a retail selling price of $1000, and the markup percentage on the selling price is 60%. What is the wholesale cost?

[INDENT]Step by step: (60% = 60/100 = .60 = .6)
x + .6x = 1000
1.6x = 1000
x = 1000/1.6
x = 625 Wholesale cost[/INDENT]

Sorry if this adds to the confusion. For me it helps to break it down. Any corrections or suggestions?

wfauchier