Fine Framings, a small framing shop, uses markup pricing to arrive at a final selling price. The firm sells its frames at a price of $10, given a $6 unit cost. Fine Framings' markup on the selling price is ____, and its markup on cost is ____.
A) 66.66%, 40%
B) 40%, 66.66%
C) 40%, 60%
D) 55%, 45%

Question

Quizplus · Accepted Answer

To find the markup on the selling price, we can use the formula:
Markup on Selling Price = (Selling Price - Unit Cost) / Selling Price x 100

So for Fine Framings:
Markup on Selling Price = ($10 - $6) / $10 x 100 = 40%

To find the markup on cost, we can use the formula:
Markup on Cost = (Selling Price - Unit Cost) / Unit Cost x 100

For Fine Framings:
Markup on Cost = ($10 - $6) / $6 x 100 = 66.66%

Therefore, the correct answer is B.

Fine Framings, a Small Framing Shop, Uses Markup Pricing to Arrive