Help please with figuring markup - for Marketing CLEP exam

[michelle19]

Hello,

I have started studying for the Marketing CLEP which I will take in July. I think I'm making more out of the markup questions as it should be fairly simple to figure out. I see there are different ways of calculating selling price and cost. For example, if I want to calculate the cost of a new table I just purchased and know the retail selling price was $1,000, and the markup percentage on the selling price is 60% - how would I determine the cost?

Is there an easy formula(s) on how to calculate these and are there many of these questions on the actual CLEP (if you've had exposure to it)?

Thank you in advance.

[anar579]

I don't remember the markup questions being this tricky. I just remember them being pretty much as they are on the IC guide, whereby they give you the product price and selling price, then they ask the markup base don the percentage of the selling price or product price. There may have even been a question asking what the markup is flat out, which is even easier.

[snazzlefrag]

Originally Posted by michelle19

Hello,

I have started studying for the Marketing CLEP which I will take in July. I think I'm making more out of the markup questions as it should be fairly simple to figure out. I see there are different ways of calculating selling price and cost. For example, if I want to calculate the cost of a new table I just purchased and know the retail selling price was $1,000, and the markup percentage on the selling price is 60% - how would I determine the cost?

Is there an easy formula(s) on how to calculate these and are there many of these questions on the actual CLEP (if you've had exposure to it)?

Thank you in advance.

Hi Michelle19,

Welcome to the group.

Please don't stress out about the markup/markdown questions on the marketing exam. There will only be a handful of them, and they are ALL easily calculated in your head. You won't get ANY question that requires serious math skills or the use of a calculator. I promise!

Examples:

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%


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


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

You will not find ANYTHING more difficult than that on the exam Michelle. If the average person cannot work the answer out quickly and in their head....it won't be on the exam. They will always ask questions where either the amount or the percentage will be easy to calculate (as long as you know the concept).

Hope that helps,
Snazzlefrag

[snazzlefrag]

Originally Posted by anar579

I don't remember the markup questions being this tricky. I just remember them being pretty much as they are on the IC guide, whereby they give you the product price and selling price, then they ask the markup base don the percentage of the selling price or product price. There may have even been a question asking what the markup is flat out, which is even easier.

Hi Ana,

How did your Fundamentals of Counseling exam go?

[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%

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

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

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

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

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

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?

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

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

wfauchier

[snazzlefrag]

Originally Posted by wfauchier

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?

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

Hi wfauchier (and Michelle),

There won't be any question as difficult as that one on the exam.

They will either give you a nice round number as the dollar amount AND/OR a percentage that is easy to figure out. So the calculations can be done quickly and easily in your head.

Please don't lose any sleep worrying about the markup questions.

[anar579]

Originally Posted by snazzlefrag

Hi Ana,
How did your Fundamentals of Counseling exam go?

Well, let's see... I had maybe 3 hours of sleep the night before, and studied only the day before for about 8 hours. I couldn't study/sleep because I'd had terrible back pain for a week.

Anyway, I feel like I passed the exam. The questions were mostly scenario type, where they give you a circumstance/situation and ask you a question based on it. There were some more direct questions, but not as many. It's all a bit hazy, I was in a lot of pain during the exam and was running on caffeine fumes, so I can't give any specifics about the content. I do remember a few questions about what a counselor should do in XYZ situation... mostly because I have been in counseling myself and the personal experience came in handy. I also remember at least 3 questions on Gestalt, which was covered on the exam but I didn't remember and pretty much guessed. Oh, and an easy question about the origins of counseling (for vocational purposes).

Like I said, I do "feel" like I passed, but only time will tell. When I get the results eons from now, I'll be able to say if the exam is passable with the IC guide.

Thanks for asking.

[wfauchier]

Originally Posted by snazzlefrag

Hi wfauchier (and Michelle),

There won't be any question as difficult as that one on the exam.

They will either give you a nice round number as the dollar amount AND/OR a percentage that is easy to figure out. So the calculations can be done quickly and easily in your head.

Please don't lose any sleep worrying about the markup questions.

Thanks for the reassurance, SF. I won't worry about them now.

-wf

[krn]

In response to the answer:
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

Mathematically Solved:
First set up the equation. Next solve for X by factoring X out. Next, isolate X by itself by dividing both sides by (1+.5). Solve the problem.
Step 1: X + .5X = 1500
Step 2: X(1 + .5) = 1500
Step 3: X = 1500/(1 + .5)
Step 4: X = 1500/1.5 = 1000

Things to know about percentages:
To go from Percents to decimals, remove the Percent sign then move the decimal over two places to the left. Ex: 30% = .3; 50% = .5; 13.7% = .137; .2% + .002

[krn]

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%

The mathematical equation to this problem is as follows:
WAY 1 - easier. Set up equation, isolate 100X, solve right hand side, isolate X by dividing both sides by 100, solve the problem, *convert the decimal to a percent.
Step 1: 100 + 100X = 150
Step 2: 100X = 150 - 100
Step 3: 100X = 50
Step 4: X = 50/100
Step 5: X = 1/2 = .5

WAY 2 ( a little more complicated)
First, set up the equation. Next, factor out the common factor of 100. Then work on isolating X.....
Step 1: 100 + 100X = 150
Step 2: 100(1 + X) = 150
Step 3: 1 + X = 150/100
Step 4: 1 + X = 15/10
Step 5: 1 + X = 1.5
Step 6: X = .5

*To go from decimals to percentage then move the decimal over two places to the right and add the percent sign. Ex: .5 = 50%; .33 = 33%; 3.37 = 337%