← Back to 3. Mathematical Models in Algebra

📝 How to find mark up amount (14 MCQs)

📖 From Digital SAT Algebra • 3. Mathematical Models in Algebra • 14 questions available

←Previous Topic:How to find discount rate percentage📝 How to find mark up amountHow to find original list price from mark up:Next Topic→

What is How to find mark up amount?

Definition:
The mark up amount is the monetary difference between the cost price (the amount paid by the seller to acquire or produce an item) and the selling price, representing the profit added to the cost, and it is calculated by subtracting the cost price from the selling price, with the formula $\text{Mark Up Amount} = \text{Selling Price} - \text{Cost Price}$ .

Working:
To find the mark up amount, simply subtract the cost price from the selling price, ensuring both are in the same units, and if the mark up is given as a percentage of cost, then the mark up amount can also be found by multiplying the cost price by the mark up rate, such that $\text{Mark Up Amount} = \text{Cost Price} \times \text{Mark Up Rate}$ .

Example:
If a retailer buys a television for $\300 \) and sells it for $\420$ , the mark up amount is $420 - 300 = \120 \), meaning the retailer adds $\120$ to the cost to cover expenses and profit.

Reason:
Calculating the mark up amount is essential for businesses to determine profit margins, set competitive prices, and ensure financial viability, as well as for consumers to understand the cost structure of products.

Easy

Medium

Hard

📝 All How to find mark up amount MCQs

Q1. A store purchases a calculator for $\$80$ and applies a $25\%$ mark-up based on cost. What is the amount of the mark-up?

\$15

\$20

✅

\$25

\$100

💡 Difficulty: easy | ✅ Correct: B

📖 Explanation: The mark-up is calculated from the original cost, not the final selling price. Thus, $25\%$ of $\80$ is $0.25(80)=\20$ . Therefore, the store adds $\$20$ to its cost before determining the selling price.

Q2. A retailer buys a backpack for $\$48$ . The retailer wants a mark-up of $30\%$ of cost. Which expression correctly represents the amount of mark-up?

48+0.30

48(1-0.30)

48(0.30)

✅

48\div0.30

💡 Difficulty: easy | ✅ Correct: C

📖 Explanation: Because the mark-up rate is applied to the cost, the amount of mark-up equals cost multiplied by the decimal form of the rate. Therefore, $48(0.30)=\$14.40$ , which is the additional amount added to the cost.

Q3. Two shops buy the same item for $\$120$ . Shop A uses a $20\%$ mark-up on cost, while Shop B uses a $20\%$ mark-up on selling price. Which statement is correct about their mark-up amounts?

A.Both mark-ups are exactly

\$24

B.Shop A's mark-up is

\<span class="katex-error" title="ParseError: KaTeX parse error: Can&#x27;t use function &#x27;

' in math mode at position 4: 24 \̲)̲, while Shop B&…" style="color:#cc0000">24 \), while Shop B's is

\</span>30

✅

C.Shop A's mark-up is

\<span class="katex-error" title="ParseError: KaTeX parse error: Can&#x27;t use function &#x27;

' in math mode at position 4: 30 \̲)̲, while Shop B&…" style="color:#cc0000">30 \), while Shop B's is

\</span>24

D.Both mark-ups are

\$30

💡 Difficulty: medium | ✅ Correct: B

📖 Explanation: A $20\%$ mark-up on cost gives $0.20(120)=\24\). For Shop B, if $M=0.20S$ and $S=120+M$ , then $M=0.20(120+M)$ , giving $0.80M=24$ , so $M=\30$ .

Q4. A furniture dealer pays $\350 \) for a chair and later discovers that transportation adds $\50$ to the item's cost. If the dealer applies a $15\%$ mark-up to the total cost, what is the mark-up amount?

\$52.50

\$60.00

✅

\$67.50

\$75.00

💡 Difficulty: medium | ✅ Correct: B

📖 Explanation: The relevant cost is the total amount invested in the item, including transportation. The adjusted cost is $350+50=\400$ . Applying $15\%$ gives $0.15(400)=\60$ , so the correct answer should be $\60$ , not $\67.50$ .

Q5. A shop records several items with their costs and mark-up rates: Item A costs $\40 \) at $35\%$ , Item B costs $\60$ at $25\%$ , and Item C costs $\$100$ at $18\%$ . Which item produces the greatest dollar mark-up?

A.Item A

B.Item B

C.Item C ✅

D.All produce the same mark-up

💡 Difficulty: medium | ✅ Correct: C

📖 Explanation: Compute each dollar mark-up rather than comparing percentages alone. Item A gives $0.35(40)=\14\), Item B gives $0.25(60)=\15$ , and Item C gives $0.18(100)=\$18$ . Therefore, Item C produces the largest mark-up.

Q6. A business owner says, “Increasing the mark-up rate from $10\%$ to $20\%$ doubles the final selling price.” Why is this reasoning incorrect when the cost is fixed at $\$500$ ?

A.The mark-up cannot exceed

\$50

B.The selling price becomes

\<span class="katex-error" title="ParseError: KaTeX parse error: Can&#x27;t use function &#x27;

' in math mode at position 5: 550 \̲)̲ and then

\" style="color:#cc0000">550

and then

\</span>600

, rather than doubling ✅

C.A percentage can never be increased

D.The selling price must always equal the cost

💡 Difficulty: medium | ✅ Correct: B

📖 Explanation: With a fixed cost of $\500 \), a $10\%$ mark-up is $\50$ , producing a $\550 \) selling price. A $20\%$ mark-up is $\100$ , producing $\600 \). The selling price therefore increases by $\50$ , not doubles.

Q7. A wholesaler buys $25$ identical notebooks for $\$200$ total. The wholesaler applies a $40\%$ mark-up to the cost of each notebook. What is the total dollar amount of mark-up for all $25$ notebooks?

\$40

\$80

✅

\$100

\$280

💡 Difficulty: medium | ✅ Correct: B

📖 Explanation: The total cost is already $\200 \), so the total mark-up can be found directly using $0.40(200)=\80$ . Equivalently, each notebook costs $\8 \), its mark-up is $\3.20$ , and $25(3.20)=\$80$ .

Q8. A salesperson calculates the mark-up on an item costing $\250$ as $\300$ because the selling price is $\$550$ . Which error did the salesperson make?

A.They multiplied by

25\%

instead of adding the cost

B.They used the selling price as the mark-up amount ✅

C.They subtracted the mark-up rate from the cost

D.They converted the percentage incorrectly

💡 Difficulty: easy | ✅ Correct: B

📖 Explanation: The mark-up is only the amount added to cost, not the entire selling price. With a cost of $\250 \) and selling price $\550$ , the actual mark-up is $550-250=\$300$ . The numerical result is correct, but the reasoning should distinguish mark-up from selling price.

Q9. A product has a cost of $\$90$ . A graph of mark-up amount $M$ versus mark-up rate $r$ is a straight line passing through $(0,0)$ and $(0.30,27)$ , where $r$ is written as a decimal. Which point should lie on the same graph?

(0.10, \$9)

✅

(0.20, \$12)

(0.40, \$30)

(0.50, \$60)

💡 Difficulty: easy | ✅ Correct: A

📖 Explanation: For a fixed cost of $\90 \), the relationship is $M=90r$ . At $r=0.10$ , the mark-up is $90(0.10)=\9$ , so $(0.10,\$9)$ lies on the graph. The other options do not satisfy this proportional relationship.

Q10. A store pays $\72 \) for an item and marks it up by $12.5\%$ . A second employee calculates the mark-up as $\9$ by taking $12.5\%$ of $\$72$ . Is the employee correct?

A.No, the mark-up is

\$8

B.No, the mark-up is

\$9.50

C.Yes, because

0.125(72)=\$9

✅

D.Yes, because

72+9=\$81

💡 Difficulty: hard | ✅ Correct: C

📖 Explanation: Convert $12.5\%$ to $0.125$ and multiply by the cost: $0.125(72)=9$ . Therefore, the employee correctly found the dollar amount of mark-up. The selling price would then be $72+9=\$81$ , but that is not the mark-up itself.

Q11. A retailer pays $\160 \) for a device, receives a $\20$ shipping charge, and then applies a $25\%$ mark-up to the total cost. If a customer later receives a $\$10$ coupon, what is the original mark-up amount before the coupon?

\$40

\$45

✅

\$50

\$55

💡 Difficulty: hard | ✅ Correct: B

📖 Explanation: The coupon affects the customer's final payment, not the original calculation of mark-up. The total cost before mark-up is $160+20=\180\). A $25\%$ mark-up is $0.25(180)=\45$ . Therefore, the correct amount is $\$45$ , making option B correct.

Q12. A retailer compares two methods for an item costing $\400 \). Method 1 applies a $35\%$ mark-up directly to cost. Method 2 first adds $\80$ and then applies an additional $10\%$ to the resulting amount. Which method gives the larger mark-up, and by how much?

A.Method 1, by

\$20

B.Method 1, by

\$12

✅

C.Method 2, by

\$12

D.Method 2, by

\$20

💡 Difficulty: hard | ✅ Correct: B

📖 Explanation: Method 1 gives $0.35(400)=\140\) mark-up. Method 2 gives a first increase of $\80$ , followed by $10\%$ of $480$ , which is $\48 \), for a total mark-up of $\128$ . Thus Method 1 is actually larger by $\$12$ , so option B is correct.

Q13. An item costs $\240 \). A retailer wants the dollar mark-up to be $\18$ greater than a $20\%$ mark-up on cost. What mark-up rate should the retailer use?

25\%

27.5\%

✅

30\%

32.5\%

💡 Difficulty: hard | ✅ Correct: B

📖 Explanation: A $20\%$ mark-up on $\240$ is $0.20(240)=\48$ . The desired mark-up is therefore $48+18=\$66$ . Dividing by the cost gives $66/240=0.275$ , or $27.5\%$ . Therefore, option B is correct.

Q14. A supplier offers a retailer two purchasing choices for the same product. Choice A costs $\500$ with a $24\%$ mark-up, while Choice B costs $\620$ with a $15\%$ mark-up. Which choice produces the smaller dollar mark-up?

A.Choice A, because its rate is lower

B.Choice A, because its mark-up is

\$120

C.Choice B, because its mark-up is

\$93

✅

D.Both choices produce a

\$120

mark-up

💡 Difficulty: easy | ✅ Correct: C

📖 Explanation: Choice A produces $0.24(500)=\120\) of mark-up. Choice B produces $0.15(620)=\93$ . Although Choice B has the higher cost, its lower percentage produces the smaller dollar mark-up. Therefore, Choice B is smaller by $\$27$ .

🔗 Related Topics (MCQs)

📝 How Use a Problem Solving Strategy MCQs 📝 How to Approach word problems MCQs 📝 How to Use a problem solving strategy for word problems MCQs 📝 How to Solve number problems MCQs 📝 Translate English sentences into algebraic equations MCQs

←Previous Topic:How to find discount rate percentage📝 How to find mark up amountHow to find original list price from mark up:Next Topic→