NOTATION

L = List price N = Net price P= Operating profit (or profit)

d = Single discount rate
d × L = Amount of trade discount
de = Single equivalent discount
rate to a series of discount rates
C = Cost D = Markdown
M = Markup BE = Break-even price
S = Selling price SRed = Reduced selling price
(or regular selling price) (or sale price)
E = Overhead expenses PRed = Reduced profit
(or operating expenses)

FORMULAS

Amount of Trade Discount | 5.1 (a) Reduced Profit | 5.5 (a)

Amount of trade discount = d × L PRed = SRed – C – E
Net Price | 5.1 (b) Reduced Profit | 5.5 (b)
N = L (1 − d) PRed = P – D
If Pred is negative, then there is a loss at sale price.
Net Price After a Series of Trade Discounts| 5.1 (c)
N = L (1 – d1) (1 – d2) (1 – d3) … (1 – dn)
Single Equivalent Trade Discount Rate | 5.1 (d)
de = 1 – [ (1 – d1) (1 – d2) (1 – d3) … (1 – dn)]
Amount Credited | 5.2
𝐴𝑚𝑜𝑢𝑛𝑡 𝑃𝑎𝑖𝑑
Amount Credited = (1−𝑑)

Selling Price | 5.3 (a)

S=C+M
Amount of Markup | 5.3 (b)
M=E+P
Selling Price | 5.3 (c)
S=C+E+P
Rate of Markup on Cost | 5.3 (d)
𝑀
Rate of markup on cost = 𝐶 × 100%

Rate of Markup on Selling Price | 5.3 (e) Net Amount of Markup | 5.6 (a)
𝑀
Rate of markup on selling price = 𝑆 × 100% Net Amount of Markup = Total Sales – Total Cost

Break Even Price | 5.3 (f) Net Rate of Markup Based on Total Cost | 5.6 (b)
BE = C + E Net Rate of Markup based on Total
𝑁𝑒𝑡 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑀𝑎𝑟𝑘𝑢𝑝
Cost= × 100%
Reduced Selling Price | 5.4 (a) 𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡
SRed = S – D Net Rate of Markup Based on Total Sales | 5.6 (c)
Net Rate of Markup Based on Total Sales=
Amount of Markdown | 5.4 (b) 𝑁𝑒𝑡 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑀𝑎𝑟𝑘𝑢𝑝
D = S – SRed 𝑇𝑜𝑡𝑎𝑙 𝑆𝑎𝑙𝑒𝑠
× 100%

Rate of Markdown | 5.4 (c)

𝐷
Rate of markdown = 𝑆 × 100%