Payton Sanchez runs a popcorn stand in the local amusement park. Her cost to produce a bag of popcorn is $0.40, which she sells for $1.90.
1) What is Payton’s markup percentage on a bag of popcorn?
(Round answer to 0 decimal places, e.g.
25%.)
2) If Payton wants to earn a 525% markup on a bag of popcorn, what
price must she charge? (Round answer to 2 decimal
places, e.g. 0.38.)
3) If Payton lowers her price per bag
to $1.54, what markup percentage will she earn on a bag of popcorn?
(Round answer to 0 decimal places, e.g.
25%.)
Markup Percentage is calculated as follows-
(Price - Cost)×100/Cost
By applying this formula we can derive the solutions to above problems.
1) What is Payton's Markup on a bag of popcorn?
= (1.90 - 0.40)×100/0.40
Markup = 375%
2) If Payton wants to earn 525% markup, what will be the price charged by her?
Lets assume Price be 'a'
525 = (a - 0.40)×100/0.4
5.25×0.4 = (a - 0.40)
a = 2.1 + 0.40 =$ 2.5 per bag
Price to be charged is $2.50
3) If price charged is $1.54, then what will be the markup?
= (1.54 - 0.40)×100/0.40
Markup = 285%
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