Pricing Calculations

Markup and Margin Calculations

Sales work often involves calculating the various relations between markup, margin, selling price and costs. Markup is defined as the difference between selling price and cost, divided by the cost. Margin is defined as the difference between selling price and cost, divided by selling price. In other words, markup is based on cost and margin is based on selling price. The following keystroke sequences are given to readily make these calculations on the HP-12C.
CALCULATE Selling Price Selling Price GIVEN Cost & Markup Key in cost, Cost & Margin Key in cost, (in %), Cost Selling Price & Key in selling price, Markup markup (in %0, Selling Price & Key in selling price, Margin margin (in %0, Cost and Key in cost, Selling Price Margin Key in margin, . 1 . 1 . , key in selling price, 1 . , key in , key in KEYSTROKES , key in markup (in %), 1 .

, key in margin

Cost Markup Markup Margin Margin

. Selling Price & Key in selling price, Cost Markup Key in markup, .

, key in cost, 1

Example 1: If the cost of an item is $160 and the margin is 20%, what is the selling price? What is the markup?
Keystrokes 160 1 20 Display 160.00 20.00 200.00 20 1 20.00 25.00 Markup (%). Cost. Margin (%). Selling price.

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Example 2: If an item sells for $21.00 and has a markup of 50%, what is its cost? What is the margin?
Keystrokes 21 1 50 Display 21.00 50.00 14.00 50 1 50.00 33.33 Margin (%). Selling price. Markup (%). Cost.

The following HP 12C program may be helpful for repetitive calculations of selling price and costs as well as conversions between markup and margin.
KEYSTROKES DISPLAY

CLEAR

000104 02-43, 33 0336 04 16 1 34 25 40 10 31 43 36 20 43 36 20 00

0405060708091011121314-43, 33

n: Unused PV: Unused

REGISTERS i: Unused PMT: Unused

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1. 2. 3. 4. 5. 6. 7.

FV: Unused Key in program.

R0-R.8: Unused

To calculate selling price, given the markup, key in the cost, press , key in the markup and press , key in the markup and press , key in the margin and press , key in the margin and press 03 00 . . 00 00 03 03 . . . . To calculate cost, given the markup, key in the selling price, press To calculate selling price, given the margin, key in the cost, press To calculate cost given the margin, key in the selling price, press To calculate markup from the margin, key in the margin and press To calculate margin from the markup, key in the markup and press

Example: Find the cost of an item selling for $38.00 with a margin of 30%. What is the markup on the item? If the markup is raised to 50%, what will the selling price be?
Keystrokes 38 30 03 Display 38.00 30.00 26.60 30 03 42.86 26.60 00 39.90 Selling price. Markup (%). Cost. Markup (%). Cost. New selling price.

26.6 50

Calculations of List and Net prices With Discounts

If it often useful to be able to quickly calculate list or net price when the other price and a series of discount rates are known. Alternatively, if the 95

list and new and several discounts are known it may be desirable to calculate a missing discount. The following series of keystrokes may be used:
1. 2. Key in 1, press Key in the first discount (as a percentage) and press . 3. 4. 5. 6. Repeat step 2 for each of the remaining known discount rates. To calculate the list price, key in the net price and press To calculate the net price, key in the list price and press (display should show 1.00), key in the net price, press in the list price. 7. Press 1 100 . 1 1 . . and key 1. 1

To calculate an unknown discount rate, immediately after doing step 3

Example: The list price of an item is $3.28 and the net price is $1.45. Two of the discount rates are 48% and 5%. What is the third discount rate?
Keystrokes 1 1 48 1 1.00 Display 1.00

1.00

1.45 3.28 1 100

0.49 10.51 3rd discount rate (%).

The following program for the HP 12C will be helpful in performing the calculations:
KEYSTROKES DISPLAY

CLEAR 1

000102031 34 25

96

041 00 1 05-44 20

30 1 00 1 20 10 1 34 30 26 2 20 00

06-43, 33 07080945

10111213-

141500 16-43, 33

n: Unused PV: Unused FV: Unused R1: R1D1xD2...D 1. 2. 3. 4. 5. 6. 7. Key in the program. Key in 1 and press

REGISTERS i: Unused PMT: Unused R0: Unused R2-R7: Unused 1. .

Key in the first discount rate (as a percentage) and press Repeat step 2 for each of the remaining discount rates. To calculate the list price, key in the net price and press To calculate the net price, key in the list price and press , key in the list price and press 07 .

1 1

. .

To calculate the unknown discount rate, key in the net price, press

Example: Calculate the unknown discount rate for the previous example. If the list price is now raised to $3.75 what is the new net price?
Keystrokes Display

97

1 48 5 1.45 3.28

1.00 0.52 0.95 10.51 07 0.89 Include 3rd discount rate in calculation. New net price. 3rd discount rate (%).

3.75

1.66

98

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HP 12C Percentage functions and calculations

Percent computations The HP12C percent computation Practice with percentage calculations

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HP 12C Percentage functions and calculations Percent computations The percentage calculation gives the result of applying a rate, expressed as parts of a hundred (per cent), to a base value. A generic expression for a percentage computation is shown in Figure 1:

x=

ba 100

Figure 1

where: a is the rate, expressed in parts of a hundred (percents); b is the base value; x expresses the percent of the base when the rate is applied (%). The percent change expresses the percent difference between two generic values related to one of the values. A generic expression for a percent change computation is shown in Figure 2:

x =

(a b ) 100
b

Figure 2

where: a is the reference amount; b is the base value (b0); x expresses the percent change from b to a (%) The percent of total expresses a percentage that relates two numbers. Usually one of them represents part of the other. A generic expression for a percent of total computation is shown in Figure 3:

xT = 100

a b

Figure 3

where: a is the part of the total; b is the total amount (b0); xT expresses the percentage a represents for the total b (%T) The HP12C percent computations The HP12C has three keys to compute percentages: b, and Z. To compute either percentage, percent change or percent of total given both a and b, simply key a and b in separated by \ and press the related percentage key. On the HP12C, the base value used in percentages (first introduced value) is always kept, so it can be used in further calculations, like net amount. For example, the following sequence is a general sequence to compute net amount:
or b\ab+ + -

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HP 12C Percentage functions and calculations - Version 1.0

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HP 12C Percentage functions and calculations Practice with percentage calculations Example 1: Mr. O'Brien needs to compute an 11% tax fee over his employees extra activities. The amount to be paid for the extra activities is $1,230. How much is 11% of $1,230? Solution: The simplest keystroke sequence to compute the 11% of $1,230 is: 1230 \ 11 b

Figure 4

Answer:

11% of $1,230 is $135.30.

Example 2: Now that Mr. O'Brien has the 11% tax fee computed, what is the net amount after adding 11% to $1,230? Assume this is performed immediately after example 1. Solution: Simply press + because both the base and the percentage (display) are still available.

Figure 5

Answer:

The net amount is $1,365.30.

Example 3: Given that Mr. O'Briens total expenses are $15,890, what is the percentage that $1,365.30 represents in this total? Assume this is performed immediately after example 2. Solution: The simplest keystroke sequence to compute this percentage is: 15890 ~ Z

Figure 6

Answer:

$1,365.30 represents 8.59% of $15,890.

Example 4: In order to convince a possible customer to buy a new stereo, the salesman offers him a 5.5% discount off the price. Given that the stereo's price is $480, how much will the customer pay for it? Solution: The keystroke sequence below can be used to compute the final price: 480 \ 5.5 b -

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HP 12C Percentage functions and calculations - Version 1.0

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HP 12C Percentage functions and calculations

Figure 7

Answer:

If he agrees with it, the customer will pay $453.60.

Example 5: The final balance of a savings account after six months is $12,325. Knowing that it started with $12,000, what is the percent change observed in this account? Solution: The keystroke sequence to compute the percent change is: 12000 \ 12325

Figure 8

Answer:

2.71%. This means that $12,350 is 2.71% bigger than $12,000.

Example 6: A large company had sales of $123,000,000 last year. Given that one of its largest affiliates contributed to this total with sales of $11,500,000, what is the percentage that represents its contribution to the total? Solution: This is a classic percent of total computation, and the following keystroke sequence can be used to compute it: 123000000 \ 115 00000 Z

Figure 9

Answer:

$11,500,000 represents 9.35% of $123,000,000 (the total).

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HP 12C Percentage functions and calculations - Version 1.0

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HP 12C Cost, Price and Margin Calculations

Cost, price and margin concepts Cost, price and margin on the HP12C Practice solving cost, price and margin problems

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HP 12C Cost, Price, and Margin Calculations Cost, price and margin concepts Items that are bought and sold have a cost to the seller and a price to the buyer. The difference between the cost and the price is the gross amount the seller makes on the sale. There are two ways of computing the percentage this difference represents. The term markup uses the cost as the basis for the percentage calculation while margin looks at the price as the basis. The diagram in Figure 1 illustrates the relationship between cost and price.

%+ cost

markup merchandise %Figure 1

price

margin

The cost is the price minus a percent of the price called margin. The price can also be viewed as the cost plus a percentage of the cost called markup. The following expressions relate margin, price and cost with each other.
PRC CST MAR (%) = 100 PRC
PRC = CST MAR(%) 1 100
MAR(%) PRC CST = PRC 100
Figure 2

How to calculate cost, price and margin on the HP12C The table below summarizes the keystroke sequence for each of the calculations above. Unknown margin cost price Keystrokes key in price, \, key in cost, key in price, \, key in margin, bkey in cost, \, 1, \, key in margin, b-z
Figure 3

Practice with solving interest rate conversion problems Example 1: A television costs $195 and its price is $300. What is the margin obtained by the store that sells these TV sets? Solution: The keystroke sequence to calculate the margin in this case is: 300 \ 195

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HP 12C Cost, Price, and Margin Calculations - Version 1.0

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HP 12C Cost, Price, and Margin Calculations

Figure 4

Answer:

The margin is 35% for a $195 cost and a $300 price.

Example 2: The store manager wants to sell more TV sets and wants to reduce the price. If she cannot reduce the margin below 28%, what is the lowest price allowed for this TV set? Assume the same $195 cost. Solution: The keystroke sequence to calculate the lower price in this case is: 195 \ 1 \ 28 b - z

Figure 5

Answer:

The lowest price for this TV set is $270.83 given a 28% margin and a $195 cost.

Example 3: Based on these figures, the store manager decides to sell the TV set for $284.99. What is the margin achieved with this price? Solution: The following keystroke sequence calculates the margin with the new price: 284.99 \ 195

Figure 6

Answer:

With the new price, the margin is now 35%.

Example 4: A new stereo system has a sales price of $150.75. Given a 35% margin, what is its cost? Solution: The keystroke sequence to calculate the cost with these figures is: 150.75 \ 35 b -

Figure 7

Answer:

The cost is $97.99.

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HP 12C Cost, Price, and Margin Calculations - Version 1.0

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HP 12C Cost, Price, and Margin Calculations Example 5: When calculating the price of a toaster, a 45% markup was used. What is the margin obtained with the sale of a toaster with this markup? Solution: The following keystroke sequence calculates the margin given a 45% markup: 45 \ \ 1 ~ b + z

Figure 8

Answer:

A margin of 31.03% is equivalent to a 45% markup.

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HP 12C Cost, Price, and Margin Calculations - Version 1.0

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HP 12C Cost, Price and Markup Calculations

Cost, price and markup concepts How to calculate cost, price and markup on the HP12C Practice solving cost, price and markup problems

hp calculators

HP 12C Cost, Price, and Markup Calculations Cost, price and markup concepts Items that are bought and sold have a cost to the seller and a price to the buyer. The difference between the cost and the price is the gross amount the seller makes on the sale. There are two ways of computing the percentage this difference represents. The term markup uses the cost as the basis for the percentage calculation while margin looks at the price as the basis. The diagram in Figure 1 illustrates the relationship between cost and price.

%+ cost

mark-up merchandise %Figure 1

price

margin

The cost is the price minus a percent of the price called margin. The price can also be viewed as the cost plus a percentage of the cost called markup. The following expressions relate margin, price and cost with each other.
PRC CST MU (%) = CST 100
MU (%) CST PRC = CST + 100

CST =

PRC MU (%) 1+ 100

How to calculate cost, price and markup on the HP12C The table below summarizes the keystroke sequence for each of the calculations above. Unknown markup price cost Keystroke key in cost, \, key in price, key in cost, \, key in markup, b+ key in price, \, 1, \, key in markup, b+z
Figure 2

Practice with solving interest rate conversion problems Example 1: A television is sold for $300. Given that it costs $195, what is the markup? Solution: The keystroke sequence to calculate the markup in this case is: 195 \ 300

Figure 3

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HP 12C Cost, Price, and Markup Calculations - Version 1.0

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HP 12C Cost, Price, and Markup Calculations Answer: The markup is 53.85% for a $300 price given that is costs $195.

Example 2: The store manager wants to sell more TV sets and wants to reduce the price. If she cannot reduce the markup below 40%, so what is the lowest price for this TV set? Assume the same $195 cost. Solution: The keystroke sequence to calculate the lower price in this case is: 195 \ 40 b +

Figure 4

Answer:

The lowest price for this TV set is $273 given a 40% markup and a $195 cost.

Example 3: Based on these figures, the store manager decides to sell the TV set for $289.99. What is the markup with this price? Solution: The following keystroke sequence calculates the markup with the new price: 195 \ 289.99

Figure 5

Answer:

With the new price, the applied markup is 48.71%.

Example 4: A new stereo system has a $150.75 sales price. Given a 53% markup for this stereo system, what must be its cost? Solution: The keystroke sequence to calculate the cost with these figures is: 150.75 \ 1 \ 53 b + z

Figure 6

Answer:

The cost of this stereo system is $98.53.

Example 5: When calculating the price of a toaster, a 32% margin is expected on each sale. What is the markup to be applied to the cost of a toaster to obtain this margin?

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HP 12C Cost, Price, and Markup Calculations - Version 1.0

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HP 12C Cost, Price, and Markup Calculations Solution: The following keystroke sequence calculates the markup given a 32% margin: 32 \ \ 1 ~ b - z

Figure 7

Answer:

A 47.06% markup is equivalent to a margin of 32%.

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HP 12C Cost, Price, and Markup Calculations - Version 1.0