Which term represents the difference between merchandise cost and selling price?

Which term represents the difference between merchandise cost and selling price?

• A. Masselin
• B. Linen
• C. Markup
• D. Mean

Answer: (C)

The difference between cost and selling price is called markup. Markup is the amount added to the cost of merchandise to cover expenses and profit, and it can be expressed as a dollar amount or as a percentage of cost. In other words, it answers how much more you charge over what the item cost. For example, if something costs 50 and sells for 70, the markup is 20 dollars, which is 40 percent of the cost. The other terms listed don’t fit this idea: Masselin and Linen are unrelated materials, and Mean is a statistical average.

The difference between cost and selling price is called markup. Markup is the amount added to the cost of merchandise to cover expenses and profit, and it can be expressed as a dollar amount or as a percentage of cost. In other words, it answers how much more you charge over what the item cost. For example, if something costs 50 and sells for 70, the markup is 20 dollars, which is 40 percent of the cost. The other terms listed don’t fit this idea: Masselin and Linen are unrelated materials, and Mean is a statistical average.