Question

The junior tops buyer plans to purchase 100 long sleeve shirts and 200 short sleeve shirts for an upcoming sale. She buys 100 long sleeve shirts at $18.00 cost (each), and the unit retail price she plans to place on these shirts is $38.00. The markup goal for the entire purchase is 52%. If she plans to retail the short sleeve shirts for $25, what is the maximum cost she can pay for each short sleeve shirt so that she meets her markup goal?

****The answer is $12.12 I just don't know how to get there.

Answer 1

HI,

In markup pricing, company adds certain markup to cost of product and then sales it.

Here. number of long sleeve = 100

cost of one long sleeve = $18

so total cost of long shirt = $1800

unit price of long shirt = $38

hence total price of long sleeve shirt = $3800

number of short sleeve = 200

lets say cost of one short sleeve =x

so total cost of short sleeve = 200x

hence total cost =1800+200x

markup = 52%

hence total price should be = (1800+200x)/(1-0.52)

actual total price = total price of long sleeve +total price of short sleeve

= 3800 + 25*200 = 8800

so equating equation

(1800+200x)/(1-0.52) = 8800

1800+200x = 8800*0.48

1800+200x = 4224

200x= 2424

x= $12.12

Hence maximum cost for short sleeve can be $12.12

Thanks