Business FinancesQuestion 1108 of 1632
Which statement about markup and margin is correct?
a.Margin exceeds markup for the same dollar profit
b.Margin is figured on price, markup on cost
c.Markup is figured on the selling price
d.Markup and margin are the same percentage
Explanation
Margin states profit as a percentage of the selling PRICE; markup states the same dollar profit as a percentage of COST. Because price is the larger base, margin is always the smaller percentage, which is why the first option has it backwards. The third option swaps the bases outright. The fourth would hold only if cost equalled price, which would mean no profit at all.
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