Markup

Markup is the amount added to the cost of a product or service in order to determine its selling price. It is used primarily in retail and wholesale businesses to ensure that the business generates a profit. Markup is often expressed as a percentage of the cost price and is a key element of pricing strategy.

The formula for Markup is:

Markup = (Selling Price - Cost Price) / Cost Price x 100%

For example, if a product costs AED 50 to produce and is sold for AED 75, the markup would be 50%. Markup is used by businesses to set prices that cover production costs and generate a reasonable profit margin. It is particularly useful for calculating retail prices and for businesses selling physical goods.