Question

A buyer plans to purchase $4,000 (retail) of sweaters. Their first purchase is for 50 sweaters costing $15 each that is planned to retail for $40 each. What percent markup must be obtained on the balance of sweater purchased in order to average a 53% markup?

Answer 1

Total purchase = $4,000

First purchase = 50 sweaters at $15 each

= 50 x 15

= $750

Second purchase = total purchase - first purchase

= 4,000-750

= $3,250

selling price per unit in first purchase unit = $40

Sales revenue from first purchase unit = selling price per unit in first purchase unit x Number of sweaters

= 40 x 50

= $2,000

Total markup required = 53% on cost

= 4,000 x 53%

= $2,120

total sales value = total purchase + Total markup required

= 4,000+2,120

= $6,120

Sales revenue required on second purchase = total sales value - Sales revenue from first purchase unit

= 6,120-2,000

= $4,120

Markup in second purchase = Sales revenue required on second purchase - Second purchase

= 4,120-3,250

= $870

Mark up percentage in second purchase = Markup in second purchase/Second purchase

= 870/3,250

= 26.77% ( rounded to two decimals)