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Sandra, an accountant, observes that her company purchased leather wallets at a cost of $4 and is currently selling them at a price of $12. What is the mark-up, as a percentage?



Write your answer using a percent sign (%).

Verified Answer :

Final answer:

The mark-up percentage is calculated by taking the difference between the selling price and the cost price and then dividing it by the cost price. In this case, Sandra's company has a mark-up percentage of 200% for the leather wallets. This percentage reflects the proportion of the cost that is added to reach the selling price.


Explanation:

Calculating Mark-Up Percentage

To determine the mark-up as a percentage, we first need to understand what mark-up is. Mark-up is the amount added to the cost price of a product to determine its selling price.

In Sandra's case, the company purchased leather wallets for $4 each and sells them for $12 each. To calculate the mark-up, we use the following formula:

  • Mark-up = Selling Price - Cost Price

Here, the cost price is $4, and the selling price is $12. So, the calculation is as follows:

  • Mark-up = $12 - $4 = $8

Next, we need to convert the mark-up into a percentage of the cost price:

  • Mark-up Percentage = (Mark-up / Cost Price) x 100

Plugging in the values:

  • Mark-up Percentage = ($8 / $4) x 100 = 2 x 100 = 200%

Thus, the mark-up percentage for the wallets is 200%.


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