Question

A buyer plans to purchase 120 handbags for a special promotion. The handbags will retail for $39.00 each. She has already placed an order for 82 handbags at $20.00 each. What is the most she can pay for each remaining handbag if she is to achieve the department’s markup goal of 68.0%?

Answer 1

She can pay for each remaining handbag = $ 30.15

Working:

Description	Amount	Percentage
Sales [120*39]	$       4,680.00	168%
Profit [ 2785.71*68%]	$       1,894.29	68%
Total Cost @120 Hand Bags [4680/168%]	$       2,785.71	100%
Cost of 82 Hand Bags [82*20]	$       1,640.00
Cost allocated to remaining 38 [120-82] Hand Bags	$       1,145.71
Cost per Hand Bag [$1,145.71 / 38 ]	$             30.15