Business FinancesQuestion 40 of 1632
What is the difference between "markup" and "margin"?
a.They are the same thing
b.Markup is calculated on selling price; margin is calculated on cost
c.Markup is calculated on cost; margin is calculated on selling price
d.Markup applies only to materials; margin applies only to labor
Explanation
Markup is the profit added as a percentage of cost. Gross margin (gross profit margin) is profit expressed as a percentage of the selling (contract) price. A 25% markup ≠ 25% margin.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)