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Hong KongBusiness maths
Business arithmetic covers markup, margin, discount, days supply against insurance, and inventory measures. Markup and margin are calculated from different bases and are frequently confused.
A small part of the calculations area, and one where a single distinction carries most of the marks.
Markup against margin
Markup is calculated on cost. Margin is calculated on selling price. The same money, expressed against different bases, gives different percentages.
An item costing 100 and selling for 125 has a markup of 25 percent on cost and a margin of 20 percent on price. Both describe the same 25 of profit. Questions offer both figures as options, so identifying which base is being asked for is the whole task.
Selling price and cost
Selling price is cost plus markup. Profit is selling price minus cost. Everything in this area is arithmetic on those two relationships.
Discounts
A discount is applied to the price. Successive discounts are applied one after the other rather than added together, which is a standard trap: two discounts of 10 percent are not a discount of 20 percent.
Inventory measures
- Turnover, which is how many times stock is replaced over a period
- Days on hand, which is how long current stock will last
- Reorder points, which are set from usage rate and lead time
These are practical rather than clinical, and they appear because inventory management is part of the technician role.
Where days supply reappears
Insurance claims turn on days supply, so the same calculation you learned for dispensing shows up again as a business question. Total quantity divided by quantity used per day.
How much to study
One session. It is a small share of an 18-question domain, and the markup-against-margin distinction is most of it.
Common questions
What is the difference between markup and margin?
Markup is calculated on cost; margin is calculated on selling price. The same profit gives different percentages.
Can I add two discounts together?
No. Successive discounts are applied one after the other.
What inventory measures appear?
Turnover, days on hand and reorder points.
Why does days supply appear here?
Insurance claims turn on it, so the dispensing calculation reappears as a business one.
How much time does it need?
One session. The markup-against-margin distinction is most of it.