Future Business Leaders of America (FBLA) Business Calculations Practice Test

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Dive into the FBLA Business Calculations Test. Sharpen your analytical skills with multiple-choice questions and gain insights with detailed explanations. Excel in your exams!

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What is the value of an item that is marked up by 25% from a cost of $100?

$125
$150
$130
$120

The correct answer is: $125

To determine the value of an item that has been marked up by 25% from a cost of $100, it's essential to first understand how to calculate a markup. Starting with the cost of the item, which is $100, you can calculate the markup amount by taking 25% of the cost. This is done by multiplying the cost by the markup percentage expressed as a decimal: 25% of $100 = 0.25 × $100 = $25. Now, to find the final selling price of the item, you add this markup to the original cost: Final selling price = Original cost + Markup Final selling price = $100 + $25 = $125. Therefore, the correct value of the item, after a 25% markup, is $125. This calculation clearly illustrates how markup works in retail pricing, allowing for an understanding of how businesses set their prices to earn a profit over their original costs.