If the wholesale cost is $10.00 and the markup is 20%, what is the selling price?

If the wholesale cost is $10.00 and the markup is 20%, what is the selling price?

• A. $12.50
• B. $12.00
• C. $11.15
• D. $13.00

Answer: (B)

Markup on cost means you add a percentage of the cost to set the selling price. With a 20% markup on a wholesale cost of 10, the amount added is 0.20 × 10 = 2. Add that to the cost: 10 + 2 = 12.00. So the selling price is 12 dollars. The other numbers would come from interpreting the 20% differently (for example, as a margin rather than a markup on cost), which is not the scenario here.

Markup on cost means you add a percentage of the cost to set the selling price. With a 20% markup on a wholesale cost of 10, the amount added is 0.20 × 10 = 2. Add that to the cost: 10 + 2 = 12.00. So the selling price is 12 dollars. The other numbers would come from interpreting the 20% differently (for example, as a margin rather than a markup on cost), which is not the scenario here.