1. 2 Due to fierce competition in the shoe industry the sale price of an item ca
ID: 2806058 • Letter: 1
Question
1.
2
Due to fierce competition in the shoe industry the sale price of an item cannot be increased. The sale price of this item is $300. If the shoe store owner feels he/she needs a mark up on cost of 20 percent to cover his/her expenses and return a reasonable profit, what is the maximum he can pay for this item?
A)$600
B)$360
C)$280
D)$250
E)$240
Brand ABC costs $50 to manufcature. Manufcaturer margin (markup on price) was 25%, wholesaler margin (markup on price) was 20%, and retailer margin (markup on price) was 50%. What was the final price for the consumer?
A)$62
B)$75
C)$112.5
D)$166.7
E)None of the above
SHOW PROCESS TO GET RESULTS PLEASE
1.
2
Due to fierce competition in the shoe industry the sale price of an item cannot be increased. The sale price of this item is $300. If the shoe store owner feels he/she needs a mark up on cost of 20 percent to cover his/her expenses and return a reasonable profit, what is the maximum he can pay for this item?
A)$600
B)$360
C)$280
D)$250
E)$240
Brand ABC costs $50 to manufcature. Manufcaturer margin (markup on price) was 25%, wholesaler margin (markup on price) was 20%, and retailer margin (markup on price) was 50%. What was the final price for the consumer?
A)$62
B)$75
C)$112.5
D)$166.7
E)None of the above
SHOW PROCESS TO GET RESULTS PLEASE
Explanation / Answer
1)
Paid by store owner = Sale Price / (1 + margin)
= 300 / (1+20%)
= 250
2)
Final price = manufacture cost * (1 + Manufcaturer margin) * (1+wholesaler margin) * (1+retailer margin)
= 50*(1+25%)*(1+20%)*(1+50%)
= 112.5
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