Margin vs markup

Answer 1

margin vs markup As every coin has two sides, likewise, margin and markup are two accounting terms which refers to the two ways of looking at business profit. When the profit is addressed as the percentage of sales, it is called profit margin. Conversely, when profit is addressed as a percentage of cost, it is called as markup.

While markup is nothing but an amount by which the cost of the product is increased by the seller to cover the expenses and profit and arrive at its selling price. On the other hand, the margin is simply the percentage of selling price i.e. profit. It is the difference between the selling price and cost price of the product.

The terms margin and markup are very commonly juxtaposed by many accounting students, however, they are not one and the same thing.

Content: Markup Vs Margin

Comparison Chart

Definition

Key Differences

Conclusion

Answer 2

The margin is the percentage of sale price, while markup is a cost multiplier. Margin can be calculated, by taking sale price as its base. On the other hand, cost price is considered as the base for the calculation of markup. The margin is the seller’s perspective of looking at profit, whereas markup is the buyer perspective of the same.

Answer 3

Margin percentage (gross margin percentage) is the difference between the selling price and the profit. Markup percentage is the difference between the actual cost and the selling price.

Answer 4

NO

Answer 5

Thanks