Markup income typically refers to the profit or revenue generated by adding a markup or margin to the cost of goods or services. In business and finance, "markup" is the amount added to the cost of producing or purchasing a product or service to determine its selling price. The markup is essentially the difference between the cost of production and the final selling price.
The formula for calculating markup is:
Markup
=
Selling Price
−
Cost Price
Markup=Selling Price−Cost Price
Markup is often expressed as a percentage of the cost price. The formula for calculating the markup percentage is:
Markup Percentage
=
(
Markup
Cost Price
)
×
100
Markup Percentage=(
Cost Price
Markup
)×100
So, markup income is the additional revenue or profit earned by a business through the application of a markup to its costs. This concept is commonly used in various industries to determine pricing strategies and to ensure that businesses cover their costs and generate a profit.
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