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If i bought something for $10.00 and sold it for $20.00, is ...

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If i bought something for...
If i bought something for $10.00 and sold it for $20.00, is it a 200% mark up?
Submitted: 9 years ago.Category: Tax
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5/4/2008
Tax Professional: Guru_Guy, Lawyer (JD) replied 9 years ago
Guru_Guy
Guru_Guy, Lawyer (JD)
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Hello,

No, that is a 100% mark up. Mark up is the difference between the sales price and market price. So if you sell something for $20 that you purchased for $10, your mark up is $10 ($20 - $10). When calculating the percentage, you compare that mark up to the purchase price. The $10 mark up is 100% of the $10 purchase price.

I hope this helps!
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Customer reply replied 9 years ago
but if you multiply $10. times 200% you get $20.
That is why I'm confused.
Tax Professional: Guru_Guy, Lawyer (JD) replied 9 years ago
The markup is basically the amount of profit made. So the profit in the scenario you lay out is only $10 ($20 sales price minus the $10 cost). That $10 profit is 100% of the initial investment. You are calculating the markup based on the total price, not just the amount of profit.

I hope this helps!
Guru_Guy
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