Heel Heaven bought a shipment of 753 pairs of women\'s shoes for $38.00 per pair

Question

Heel Heaven bought a shipment of 753 pairs of women's shoes for $38.00 per pair. The store sold 148 pairs at the regular selling price of $193.00 per pair, 43 pairs at a clearance sale at a discount of 34%, and the remaining pairs during an inventory sale at a price that equals cost plus overhead. The store's overhead is 16% of cost. What was the price at which the shoes were sold during the clearance sale? What was the selling price during the inventory sale? What was the total profit realized on the shipment? What was the average rate of markup based on cost that was realized on the shipment?

Explanation / Answer

Answer:(a) Price =$193*(1-0.34)=$127.38

Answer:(b) Selling price=($38+($38*16%)=$44.08

Answer:(c) Total profit=Selling Price-Cost

=(148*193)+(43*127.38)+(562*44.08)-(753*44.08)

=28564+5477.34+24772.96-33192.24

=$25622.06

Answer:(d) Average rate=[25622.06/(33192.24)]*100

=77.19%

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