Calculating Percent Markup Based on Cost

In addition to being expressed in dollar amounts, markup is frequently expressed as a percent. There are two ways of representing markup as a percent: based on cost and based on selling price.

Manufacturers and most wholesalers use cost as the base in calculating the percent markup because cost figures are readily available to them. When markup is based on cost, the cost is 100%, and the markup is expressed as a percent of that cost.

Retailers, however, use selling price figures as the base of most calculations, including percent markup. In retailing, the selling price represents 100%, and the markup is expressed as a percent of that selling price.