When determining the markup, it is important to know whether it is based on cost or selling price.

Question

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Knowing whether the markup is based on cost or selling price is essential in determining the final price of the product or service. If the markup is based on cost, the markup percentage is calculated by dividing the markup amount by the cost. On the other hand, if the markup is based on selling price, the markup percentage is calculated by dividing the markup amount by the selling price. Therefore, understanding the basis of the markup is crucial in accurately calculating the final price.

When Determining the Markup, It Is Important to Know Whether