Which of the following is a description of mark-up?
A.
Profit expressed as a percentage of the selling price
B.
Profit expressed as a percentage of costs
C.
Profit expressed as a percentage of fixed costs
D.
Profit expressed as a percentage of variable costs
The Answer Is:
B
This question includes an explanation.
Explanation:
Mark-up is defined as profit expressed as a percentage of the cost. It calculates the profit margin based on the cost price rather than the selling price, which allows companies to determine how much they are earning over their production or purchase costs. This aligns with standard accounting and CIPS definitions of mark-up in procurement contexts.
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