In mark-up cost pricing, if cost equals 100% and markup equals 40%, what is the selling price?

• A. £100
• B. £140
• C. £120
• D. £180

Answer: (B)

Mark-up cost pricing involves adding a markup percentage to the cost to determine the selling price. The markup is based on the cost, so you multiply the cost by 1 plus the markup percentage. Here, the cost is 100% and the markup is 40%, which means the selling price is 140% of cost. If the cost is £100, 40% of £100 is £40. Add that to the £100 cost to get £140. Other options would reflect different amounts added or no markup, so the selling price is £140.