SENIOR

Business Math HIGH

SCHOOL

Computing Mark-up and Module

Margin 10
Quarter 1
Business Math
Quarter 1 – Module 10: Computing Mark-up and Margin
First Edition, 2020

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Published by the Department of Education Division of Pasig City

Development Team of the Module

Writer: Marygrace A. Salon
Editors: Nenet M. Peñaranda
Reviewers: Carmelita B. Peralta
Illustrator: Name
Layout Artist: Name
Management Team: Ma. Evalou Concepcion A. Agustin
OIC-Schools Division Superintendent
Aurelio G. Alfonso, Ed. D.
OIC-Assistant Schools Division Superintendent
Victor M. Javeña, Ed. D.
Chief - School Governance and Operations Division
OIC – Chief Curriculum Implementation Division
Education Program Supervisors
1. Librada L. Agon, Ed. D., EPP/TLE
2. Liza A. Alvarez, Science
3. Bernard R. Balitao, Araling Panlipunan
4. Joselito E. Calios, English
5. Norlyn D. Conde, Ed. D., MAPEH
6. Wilma Q. Del Rosario, LRMS
7. Ma. Teresita E. Herrera, Ed. D., Filipino
8. Perlita M. Ignacio, Ph. D., ESP/SPED
9. Dulce O. Santos, Ed. D., Kinder/MTB
10. Teresita P. Tagulao, Ed. D., Mathematics
Business SENIOR
HIGH
SCHOOL
Math
Module

10
Quarter 1

Computing Mark-up
and Margin
Introductory Message

For the facilitator:

Welcome to the Business Math for Senior High School Module on Computing Mark-
up and Margin!

This module was collaboratively designed, developed and reviewed by educators

from Schools Division Office of Pasig City headed by its Officer-In-Charge Schools
Division Superintendent, Ma. Evalou Concepcion A. Agustin in partnership with
the Local Government of Pasig through its mayor, Honorable Victor Ma. Regis N.
Sotto.
The writers utilized the standards set by the K to 12 Curriculum using the Most
Essential Learning Competencies (MELC) while overcoming their personal, social,
and economic constraints in schooling.

This learning material hopes to engage the learners into guided and independent
learning activities at their own pace and time. Further, this also aims to help
learners acquire the needed 21st century skills especially the 5 Cs namely:
Communication, Collaboration, Creativity, Critical Thinking and Character while
taking into consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of
the module:

Notes to the Teacher

This contains helpful tips or strategies
that will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to
manage their own learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
For the learner:

Welcome to the Business Math Module on Computing Mark-up and Margin!

The hand is one of the most symbolized part of the human body. It is often used to
depict skill, action and purpose. Through our hands we may learn, create and
accomplish. Hence, the hand in this learning resource signifies that you as a
learner is capable and empowered to successfully achieve the relevant
competencies and skills at your own pace and time. Your academic success lies in
your own hands!

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 material while being an active
learner.

This module has the following parts and corresponding icons:

Expectation - These are what you will be able to know after completing the
lessons in the module

Pre-test - This will measure your prior knowledge and the concepts to be
mastered throughout the lesson.

Recap - This section will measure what learnings and skills that you
understand from the previous lesson.

Lesson- This section will discuss the topic for this module.

Activities - This is a set of activities you will perform.

Wrap Up- This section summarizes the concepts and applications of the
lessons.

Valuing-this part will check the integration of values in the learning

competency.

Post-test - This will measure how much you have learned from the entire
module. Ito po ang parts ng module
 EXPECTATION

At the end of the learning module, you are expected to:

1. llustrate how to compute mark-up based on cost and mark-up based on
selling price. (ABM_BM11BS-Ih-4)

PRETEST

Directions. Analyze and identify what is being asked then solve. Write your solution
on your notebook or any writing pad.

Grace Belleza makes hand-braided mats, at a cost of ₱25 per mat, to sell at
local craft shows. She has 40 mats on hand and expects to sell them all for a total
of ₱1,500. Solve for the following in sequence: total cost of mats, gross profit, mark-
up, margin, and gross profit per mat (using mark-up and margin).

RECAP

Directions: Complete the table. Solve for the gross profit, mark-up and margin.
Write your answer in your notebook or any writing pad.

Revenue Cost of Goods Gross Profit Mark-up Margin

A. ₱27,000 ₱23,500
B. ₱600 ₱501.13
 LESSON

Knowing the difference between a markup and a margin helps you set goals.
If you know how much profit you want to make, you can set your prices
accordingly using the margin vs. markup formulas.

If you don’t know your margins and markups, you might not know how to
price a product or service correctly. This could cause you to miss out on revenue.
Or, you might be asking too much, and many potential customers are not willing to
pay your prices.

Check your margins and markups often to be sure you’re getting the most
out of your strategic pricing.

Mark-up is the quotient of the gross profit and the cost of goods sold while
Margin is the quotient of gross profit and revenue. The formula for mark-up and
margin were given.

Gross profit
Mark – up Mc (%) = x 100
Cost of Goods Sold
Gross profit
Margin Ms (%) = x 100
Revenue

What if mark-up and/or margin are given and you need to solve for other
terms? Derivation of formula will be the easiest help you can have.

Example 1: JPB & MS Company sold an inverter split type air-conditioning unit
worth ₱31,999. The cost of the split-type aircon is 85% of its selling price. What is
the cost and gross profit of the product, the mark-up, and the margin?
Given:
Revenue = ₱31,999
Cost = 85% of ₱31, 999
Cost = ₱27, 199.15
Formula:
Gross Profit = Revenue – Cost of Goods Sold
Gross profit Gross profit
Mc (%) = Cost of Goods x 100 Ms (%) = x 100
Revenue
Solution:
Gross Profit = 31,999 – 27,199.15
Gross Profit = ₱4, 799.85
4,799.85 4,799.85
Mc (%) = 27,199.15 x 100 Ms (%) = x 100
31,999
𝐌𝐜 (%) = 𝟏𝟕. 𝟔𝟓% 𝐌𝐬 (%) = 𝟏𝟓%
Example 2: A gadget store sold a tablet and earns a gross profit of ₱3,750. If the
mark-up is 27% and margin is 21.26%, compute for the cost of goods sold and the
revenue.
Given:
Gross profit = ₱3, 750
Mark-up = 27% Margin = 21.26%
Formula:
𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭 𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭
𝐌𝐜 (%) = 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐆𝐨𝐨𝐝𝐬 𝐱 𝟏𝟎𝟎 𝐌𝐬 (%) = 𝐱 𝟏𝟎𝟎
𝐑𝐞𝐯𝐞𝐧𝐮𝐞
Solution:
3,750 3,750
0.27 = Cost of Goods 0.2126 = Revenue
0.27(Cost of Goods) = 3,750 0.2126(Revenue) = 3,750
0.27(Cost of Goods) 3,750 0.2126(Revenue) 3,750
0.27
= = 0.2126
0.27 0.2126
Cost of Goods = ₱13, 888.89 Revenue = ₱17, 638.76

ACTIVITIES

The average retail selling price of an e-scooter is ₱15,000. The owner has a
chance to purchase 6 items of these e-scooter at a total cost of ₱70,000. If the
trader’s goal margin on the product is not less than 20%, should he make the
purchase? Why? Why not?

Fully support your answers mathematically.

Solve for the gross profit per scooter using mark-up formula.
 WRAP–UP

In order to solve every problem, one must comprehend the problem, be able
to analyze the given, and come up with a way to solve it.
To help you more on solving problems involving Mark-up and Margin, here are the
list of formula you can use and its derivation.

Given Formula to use (Total amount as basis)

𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭
𝐌𝐜 (%) = 𝐱 𝟏𝟎𝟎 (original formula)
𝐂𝐨𝐬𝐭 𝐨𝐟 𝐆𝐨𝐨𝐝𝐬 𝐒𝐨𝐥𝐝

Mark-up 𝐆𝐫𝐨𝐬𝐬 𝐏𝐫𝐨𝐟𝐢𝐭 = 𝐌𝐜 𝐱 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐆𝐨𝐨𝐝𝐬 𝐒𝐨𝐥𝐝

𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭
𝐂𝐨𝐬𝐭 𝐨𝐟 𝐆𝐨𝐨𝐝𝐬 𝐒𝐨𝐥𝐝 =
𝐌𝐜 (%)
𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭
𝐌𝐬 (%) = 𝐑𝐞𝐯𝐞𝐧𝐮𝐞
𝐱 𝟏𝟎𝟎 (original formula)

Margin 𝐆𝐫𝐨𝐬𝐬 𝐏𝐫𝐨𝐟𝐢𝐭 = 𝐌𝐬 𝐱 𝐑𝐞𝐯𝐞𝐧𝐮𝐞

𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭
𝐑𝐞𝐯𝐞𝐧𝐮𝐞 =
𝐌𝐬
Converting Mark-up to 𝐌𝐬
Margin 𝐌𝐜 (%) = 𝒙 𝟏𝟎𝟎
𝟏 − 𝐌𝐬
Converting Margin to 𝐌𝐜
𝐌𝐬 (%) = 𝒙 𝟏𝟎𝟎
Mark-up 𝟏 + 𝐌𝐜

For amount per quantity, just divide the term by the number of products sold.

VALUING

Question to ponder: Consider yourself as a businessperson. In what other ways do

you think you can have high sales of product without risking your customer’s
satisfaction and loyalty?
 POSTTEST

Directions: Match column A to Column B. Given cost of goods sold is ₱25/each,

revenue is ₱1,800/40pcs. (Assume that all 40 products were sold)

Column A Column B
1. Total Cost A. ₱20.00
2. Gross Profit B. ₱45.00
3. Margin C. ₱800.00
4. Mark-up D. ₱1,000.00
5. Revenue per quantity E. ₱1,800.00
F. 44.44%
G. 50%
H. 60%
I. 80%
 RECAP
Revenue Cost of Goods Gross Profit Mark-up Margin
A. ₱27,000 ₱23,500 ₱3,500 14.89% 12.96%
B. ₱600 ₱501.13 ₱98.87 19.73% 16.48%
PRE-TEST
Given:
Cost = ₱25/mat Quantity = 40 mats
Total Cost = ₱1,000 Revenue = ₱1,500/40 mats
Formula:
Gross profit = Revenue – Cost of Goods Sold
Gross profit Gross profit
of Goods Revenue
Mc (%) = Cost x 100 Ms (%) = x 100
Gross Profit/quantity = (Mc x Cost of Goods Sold)/quantity
Gross Profit/quantity = (Ms x Revenue)/quantity
Solution:
Gross profit = 1,500 – 1,000
Gross Profit = ₱500
500 500
1,000 1,500
Mc (%) = x 100 Ms (%) = x 100
𝐌𝐜 (%) = 𝟓𝟎% 𝐌𝐬 (%) = 𝟑𝟑. 𝟑𝟑𝟑𝟑%
Gross profit per mat using mark-up Gross profit per mat using margin
Gross profit/mat = (0.50 x 1,000)/40 Gross profit/mat = (0.333333 x 1,500)/40
Gross Profit/mat = ₱12.50 Gross Profit/mat = ₱12.50
KEY TO CORRECTION
 markup-chart-infographic.
Markup”. https://www.patriotsoftware.com/blog/accounting/margin-vs
Amanda, Cameron, “Markup vs. Margin Chart: How to Calculate Margin and
Inc., 2016), 72-79
Lopez, Martin-Lundag, Dagal, Business math Textbook. (Quezon City: Vibal Group,
REFERENCES
POST-TEST
1. D, 2. C, 3. F, 4. I, 5. A
ACTIVITIES
Given:
Revenue = ₱15,000/scooter Quantity = 6 e-scooters
Total Revenue = ₱90,000 Cost = ₱70,000
Margin should not be less than 20%
Formula:
Gross profit = Revenue – Cost of Goods Sold
Gross profit
Revenue
Ms (%) = x 100
Gross Profit/quantity = (Mc x Cost of Goods Sold)/quantity
Solution:
Gross profit = 90,000 – 70,000
Gross Profit = ₱20,000
Gross profit
Revenue
Ms (%) = x 100
20,000
The owner of the store should make the purchase.
90,000
Ms (%) = x 100
Since the computed margin, 22.22%, is greater than
𝐌𝐬 (%) = 𝟐𝟐. 𝟐𝟐%
his target margin.
20,000
Mc (%) = 70,000 x 100
Mc (%) = 28.5714%
Gross profit per scooter = ₱3,333.33
Gross profit per scooter = (0.2857 x 70,000)/6