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WAEC Accounting 2019 Paper

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Question : 15

Total: 45

The mark-up on a product is 2/3. The margin is

3/5
2/5
1/3
2/9

Solution:

Concept:

Mark-up is profit divided by cost price, while margin is profit divided by selling price.

Explanation:

Let the cost price be

1

.

Mark-up

= \frac{2}{3}

means profit is

\frac{2}{3}

of the cost.

So profit

= \frac{2}{3}

.

Selling price

= \text{Cost} + \text{Profit} = 1 + \frac{2}{3} = \frac{5}{3}

.

Margin

= \frac{\text{Profit}}{\text{Selling Price}} = \frac{\frac{2}{3}}{\frac{5}{3}} = \frac{2}{5}

.

Answer:

B.

\frac{2}{5}

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