A company operating a chain of retail provision stores invoices goods to the branches at cost plus a mark-up of 25%. What is the mark-up percentage on selli...

A company operating a chain of retail provision stores invoices goods to the branches at cost plus a mark-up of 25%. What is the mark-up percentage on selling price?

Answer Details

To find the mark-up percentage on selling price, we need to understand how cost and selling price are related. When the company invoices goods to the branches at cost plus a mark-up of 25%, it means that the selling price is equal to the cost plus 25% of the cost. For example, if the cost of a product is $100, the selling price would be $100 + (25% of $100) = $125. Now, to calculate the mark-up percentage on selling price, we need to find out what percentage of the selling price is the mark-up. Let's take the same example above. The selling price of the product is $125, and the cost of the product is $100. Therefore, the mark-up is $25 ($125 - $100). To find out the mark-up percentage on selling price, we divide the mark-up by the selling price and multiply by 100. So, (mark-up ÷ selling price) × 100 = (25 ÷ 125) × 100 = 20% Therefore, the mark-up percentage on selling price is 20%. Option C (20%) is the correct answer.