is it mark-up OR margin

raja asad · 03-19-2009, 08:01 AM

A pen is sold at Rs.48 at a profit of 20 percent.
what is the amount of profit in it?

wasim akram · 03-19-2009, 06:34 PM

Sale Value x profit / (profit+cost) = Margin Rs.8

raja asad · 03-20-2009, 05:33 AM

u said that it is margin of 8.
you r right.

please tell me where i m wrong.
as i know margin is profit on sale whereas markup is profit on cost.
in this question it is profit on sale it means our sales are 100.
As sale always contains both cost and profit so in this 48 contains both cost and profit.
now assuming this 48 is equal to 100 means 80% is cost and 20% is profit.
so, cost=(80/100)*48
cost=38.4
profit=48-38.4=9.6
whereas you assumed cost=100 and sale=120
why?

wasim akram · 03-20-2009, 09:02 PM

At a Profit of 20% mean cost is 100 and profit is 20 so sales price would be 120 so
If sale value is 120 then profit = 20
If sale value is 48 then profit = 20/120*48
cost + margin = sales
ur understanding of profit or margin is misunderstood.

Adil.Iqbal · 03-20-2009, 11:57 PM

Markup belongs to cost and margin belongs to sales

Example if you buy something for Rs 10 and sell it for Rs 20, how much profit have you made?

Mark up = (profit/cost)*100 =(20-10)/10 = 100%

In this case the Mark Up on cost has been 100%.

And;

Margin = (profit/Sales)*100 =(20-10)/20 = 50%

But the Margin on sales has been 50%.

raja asad · 03-21-2009, 01:39 AM

wasim agar aap 20% ko profit on cost keh rahay ho to phir aap ka jawab 8 markup hay.
because jaisa aqeel nay kaha markup is on cost.

aqeel waisy aap nay is question ka kia jawab nikala hay?

raja asad · 03-21-2009, 01:42 AM

sorry aqeel nahi adil.

Adil.Iqbal · 03-21-2009, 05:25 AM

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by raja asad
 wasim agar aap 20% ko profit on cost keh rahay ho to phir aap ka jawab 8 markup hay.
because jaisa aqeel nay kaha markup is on cost.

aqeel waisy aap nay is question ka kia jawab nikala hay?
<hr height="1" noshade id="quote"></blockquote id="quote">

wasin answer's right bcoz in ur question profit u provided seems to be on cost.....

wasim akram · 03-21-2009, 07:44 PM

Please understand the terms "Margin", "Mark up" "PRofit" "Interest" cleary. In my opinion there are misunderstandings. On web browsing u will get it very clearly.

Sales always include profit. in other word profit is on cost. very simple Jani... make ur mind and go ahead