What is the different between "markup" and "margine" in accounting?

Question

can u pls explain me dose two terms in accounting by using and small example...

thanks

Answer 1

It's similar but it's not the same. Different point of view/ angle.

When you bought an item for $100, unless you are a charity organization/ individuals, then obviously you look to sell it at a higher amount (normal profit seeking organization), let say $105. Then it's says that you have a mark up of ($105-$100) $5 or 5%.

Similarly, when you have a sales of $105 and a cost of $100 to produce that (goods/ services), it's said that your margin is $5.

A Mark up is your additional amount that you put on top of your cost as your expected rate of return/ profit. A margin is the difference between your sales (price) against your cost.