Question

A store is selling baby strollers that cost them $249. The stores operating expenses are 20% of the cost, and their operating profit is $55. What is the selling price of the stroller, and what should the rate of markdown be if the store wishes to break even ? Answer is S= $353.80 and %d=15.55%...... Need solutions please

Answer 1

Since the baby strollers’ cost is $ 249, the operating expenses are 20 % of $ 249 i.e. $ 49.80. Further, the store’s operating profit is $ 55 so that their gross profit is $ 55+$ 49.80 =           $ 104.80. Thus, the selling price of the baby stroller is cost+ gross profit = $ 249 +$ 104.80 = $ 353.80.

Now, if the store wishes to break even, then the selling price of the baby stroller would be cost + operating expenses = $ 249+$ 49.80 = 298.80. This would represent a mark down of [ (353.80- 298.80)/353.80]*100 % i.e. 15.55 %.(approximately , on rounding off to 2 decimal places).