If your intent is to "split" the hotel's pre-transfer gross margin (42% of sales) roughly in half between Hotel and Events, a 20% markup on cost does not equal half of a 42% margin on sales. To award half of a 42% margin on a sales basis, the equivalent markup on cost should be about 26.6%. explain why we do this and explain why we choose 26.6% to be the markup cost for the full cost pricing strategy