Asked by Amaya Jones on Apr 28, 2024
Verified
All of the following are true about markup EXCEPT that it is:
A) based on a product's selling price or cost.
B) intended to allow wholesalers to profit.
C) usually expressed as a percentage.
D) representative of gross profit.
E) representative of net profit.
Markup
The amount added to the cost price of goods to cover overhead and profit, expressed as a percentage of the cost.
Gross Profit
The financial gain obtained after subtracting the cost of goods sold from the total revenue.
Net Profit
The amount of money remaining after all operating expenses, interest, taxes, and dividends have been deducted from total revenue.
- Grasp the concept of markup in pricing strategies and how it affects retail and wholesale pricing.
Verified Answer
FJ
Frans JessicaMay 03, 2024
Final Answer :
E
Explanation :
Markup is related to gross profit, which is the difference between the sales revenue and the cost of goods sold, not net profit, which also accounts for operating expenses, taxes, interest, and other factors.
Learning Objectives
- Grasp the concept of markup in pricing strategies and how it affects retail and wholesale pricing.