Answer:
The Importance of Understanding Markup
The Importance of Understanding MarkupUnderstanding markup is very important for a business. For example, establishing a good pricing strategy is one of the most important tools a profitable business can have. The markup of a good or service must be enough to offset all business expenses and generate a profit.
Explanation:
The Difference Between Markup and Gross Margin
A lot of people use the terms markup and gross margin interchangeably. Although both terms are used to help determine profitability, they are different!
MARKUP is the difference between a product’s selling price and cost as a percentage of the cost. For example, if a product sells for $125 and costs $100, the additional price increase is ($125 – $100) / $100) x 100 = 25%.
