The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Help please
Post Info TOPIC: Help please
Lisa68


Veteran Member

Status: Offline
Posts: 91
Date:
Help please
Permalink Closed

Hello, can anyone help me with an assignment question please:

Its a question regarding  the valuation of stock,  I have a selling price of £24,000 and I need to work out the cost as follows:

Cost Price + 20% = selling price

so I have the selling price and the mark up on cost as a fraction but how do I calculate the mark up on sales to work back to cost???

I hope that makes some sense..

Lisa

__________________
RobH


Expert

Status: Offline
Posts: 1963
Date:
Permalink Closed

Purchases would have been £20k. £20,000 plus 20% is £24k.

I work backwards by dividing selling price by 1.2, so 24000/1.2 is 20000.

Rob

__________________
Rob
www.accounts-solutions.com
Shamus


Forum Moderator & Expert

Status: Offline
Posts: 11981
Date:
Permalink Closed

Hi Lisa,

1) Convert the markup to a margin.

2) Multiply the selling price by the margin

3) subtract the result from selling price to give the cost price

I can give you the step by step answer if you want but do you want to have a go yourself first?

__________________

Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Lisa68


Veteran Member

Status: Offline
Posts: 91
Date:
Permalink Closed

Hi Rob

Thankyou thats quite a simple way, easy when you know how smile

Lisa



__________________
Shamus


Forum Moderator & Expert

Status: Offline
Posts: 11981
Date:
Permalink Closed

Darn it, shows old lightning fingers is back again!

My way would have been

1) 20% markup = 16.6666667 margin
To calculate the margin convert to a fraction, so 20% = 1/5
To convert the fraction to a margin = 1 over denomenator plus numerator from the fraction
so 1/5 = 1 over 1+5 = 1/6

Convert 1/6 to a decimal = 16.6666667

2) 24000 * .166666667 = 4000

3) 24000 - 4000 = 20000

Robs way is better but I stick with mine as it uses similar rules for converting margins to markups as markups to margins.

We did this in last Friday afternoons quiz so you might want to give those examples a try as well.

talk soon,

Shaun.


__________________

Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Lisa68


Veteran Member

Status: Offline
Posts: 91
Date:
Permalink Closed

Shamus wrote:

Hi Lisa,

1) Convert the markup to a margin.

2) Multiply the selling price by the margin

3) subtract the result from selling price to give the cost price

I can give you the step by step answer if you want but do you want to have a go yourself first?


Hope i'm not being thick but how do you convert the markup to a margin? I do like Robs way to calculate it but I am interested in your method also..Thankyou for your help.

 Lisa



__________________
Lisa68


Veteran Member

Status: Offline
Posts: 91
Date:
Permalink Closed

oops looks like you beat me to it... Thankyou!  going to get my head round it now..

Lisa

__________________
RobH


Expert

Status: Offline
Posts: 1963
Date:
Permalink Closed

Hi Shaun,

I think your way is better as it works with the margin conversions, mine is just quick for this particular question. Are you working on some questions for tomorrow's quiz?

Rob

__________________
Rob
www.accounts-solutions.com
Shamus


Forum Moderator & Expert

Status: Offline
Posts: 11981
Date:
Permalink Closed

Hi Rob,

I may have to postpone this weeks quiz as I'm a bit inundated at the moment with a data analysis job.

Unfortunately the clients moved to Excel 2007 so I've got no choice but to use the ribbon which whilst I'm starting to get used to it it really is aimed at casual rather than power users of Excel and it's slowing me down something chronic.

I've only been popping in occasionally all week (22 posts in a week! That's normally an average day for me!!!).

Read the other post about your work as our cultural attache to Spain. Big question is, does one British person in the museums negate the drunken antics of a thousand on the beach?

And second big question is, what stops gaudi's architecture becoming one huge pigeon coupe? All those holes in it just seem perfect for our little feathered freinds... Actually, I like the Slovenian word for Pigeon which translated comes out as flying rat!

Anyway, good to have you back matey.

talk in a bit,

Shaun.

-- Edited by Shamus on Thursday 15th of April 2010 05:16:09 PM

__________________

Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Shamus


Forum Moderator & Expert

Status: Offline
Posts: 11981
Date:
Permalink Closed

Hi Lisa,

the questions thread from last Friday covering Margins and Markups was

http://www.activeboard.com/forum.spark?aBID=106474&p=3&topicID=35163661

started off that someone was bored and developed into a few questions to stretch the old grey matter a bit. (They were short but not completely straight forward scenarios).

Hope that you enjoy them. Try not to cheat and look at the answers.

__________________

Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
RobH


Expert

Status: Offline
Posts: 1963
Date:
Permalink Closed

Hi Shaun,

The Gaudi architecture is really interesting, it isn't exactly my cup of tea but it is different! I liked the cathedral as you could see all the biblical stories depicted. I didn't go inside though as I like architecture from the outside!

I thought you had had a quiet few days and neithr Bill nor Lorraine has passed the 500 mark!

I'm a bit inundated myself but maybe I'll throw a ferw tax questions in...bet you wouldn't be able to resist an answer!

Catch you later,

Rob

__________________
Rob
www.accounts-solutions.com
Lisa68


Veteran Member

Status: Offline
Posts: 91
Date:
Permalink Closed

Hi Shaun

Thankyou i'll give it a go this evening, I should be a whizz kid now I know the formula, i'll try not to cheat  wink.gif

__________________
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Help please
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About