ICAEW BIP · Chapter 4 · Question 2 of 11
A product sells for £150, which gives a profit margin of 20% on the selling price. What is the equivalent mark-up on cost?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 25%
Explanation
Cost = £150 x (1 - 0.20) = £120, so profit = £30. Mark-up on cost = £30 / £120 = 25%. A margin is always a smaller percentage than the equivalent mark-up because it is measured on the larger selling price.
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