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Markup-on-Cost Pricing Method

Using this method, markup is reflected as a percentage by which initial price is set above product cost as reflected in this formula:

Markup Amount = Markup Percentage
  Item Cost

$15 = 30%
$50


The calculation for setting initial price is determined by simply multiplying the cost of each item by a predetermined percentage then adding the result to the cost:

Item Cost + (Item Cost x Markup Percentage) = Price
50 + (50 x .30 = $15) = $65
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