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4. The owner of a sporting goods store has decided on a 250 percent

markup on all apparel. How much will the store charge for bicycle

shorts it purchased from the wholesaler for $10 each? What did the

store pay for running shoes that it is selling for $70? (LO 8.2-2)

Respuesta :

sadddamkashmiri801

Answer:

Part A. Profit Markup $25 per unit

Part B. Profit Markup $50 per unit

Explanation:

Always remember that while calculating Markup, the cost is always deemed 100%. This means

Sales     =      Cost            +        Markup

120%      =       100%         +          20%

Mathematically,

Markup = Cost     *     %age we want that is Markup %age / %age we are standing at

Part A. As we know that the cost of the product is $10 which 100% and the Markup percentage is 250% in the question.

By putting values, we have:

Markup = $10     *  250% / 100%  = $25 per unit

Part B. The company under the markup system, would pay the cost which is always 100%.

So here, selling price is given which is $70 which includes 100% and 250% profit markup. This means $70 is 350% (100% Cost + 250% Profit Markup).

Mathematically,

Profit Markup = Sales     *   Markup %age (%age we want) / %age we are at

Sales is 350%, so we are at 350%

Profit Markup = $70 * 250% / 350% = $50 per unit

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