Fred buys flags from a manufacturer for f dollars each and then sells the flags in his store for a 26%markup.

the markup is 1.26 (the amount added is .26)

1.26x (when x is the price Fred buys them for from the manufacturer)

1.26(40)

$50.40 is the retail price

50.4-40

$10.40 is the markup

Step-by-step explanation:

The 26% markup means that he is selling the flags 26% above the cost.

So, the cost would represent 100%, which is 1, and 26% of markup in decimal number is 0.26.

The price including the markup would be 1.26 as decimal or 126% as percentage.

The problem states that the cost is unknown, so we represent that with a variable x. The retail price would be 1.26x, which is 126% per flag.

Finally, if Fred paid $40 per flag, the actual retail price would be:

1.26($40)=$50.40.

With $10.40 of markup.