Question

A business buys supply materials for $15 less 25%, 20%, and 10%. The store prices the merchandise at a regular selling price to cover expenses of 5% of the regular selling price and the net profit of 50% of the cost. Business mark with the price to be able to offer a discount of 10% while still maintaining his regular markup. During the clearance sale, supply materials were sold at a markdown of 25%.

1. How much retailer pays for that appliance?

2. How much is the regular profit?

3. What is the regular selling price?

4. What was the marked price?

5. What is the sale price?

6. What profit (loss enter as a negative value) was realized during the sale event?

Answer #1

1. Series of discounts are applied. They are = ($ 15*(100-25)%)*(100-20)%*(100-10)% => $ 8.10.

2. Regular Profit => 50% of cost ie 8.1*50% => $ 4.05

3. Regular Selling Price =>

Cost | $ 8.10 |

Profit | 50%*8.10 = $ 4.05 |

Total | $ 12.15 |

This will be 95% of selling price as balance of 5% is towards expenses. So, 12.15/95% =>$ 12.79/-

4. Mark up discount is 10%. This is on markup price. So Markup price => 12.79/(100-10)% =>$ 14.21

5. Discount on markup is 25%, So profit ($):

Markup Price | 14.21 |

Less: Markup discount (25%) | 3.55 |

Sales price | 10.66 |

Less: Cost price | 8.10 |

Less: expenses (12.79*5%) | 0.64 |

Profit | 1.92 |

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