Biology Forums - Study Force

The Nursery bought 800 plants auctioned off en bloc for $5550.00 This means that each plant has the same cost. On inspection, the plants were classified as normal quality, seconds, and substandard. The 420 normal quality plants were sold at a markup of 85% of cost, the 290 plants classified as seconds were sold at a markup of 21% of cost, and the plants classified as substandard were sold at 83% of their cost.
a) What was the unit price at which each of the three classifications was sold?
b) If overhead is 23% of cost, what was the amount of profit realized on the purchase?
c) What was the average rate of markup based on the selling price at which the plants were sold?

a)    Cost per normal =   = 6.9375
   Unit prices:
   Normal quality    = 1.85(6.9375) = $12.83
   Seconds    = 1.21(6.9375) = $8.39
   Substandard    = .83(6.9375) = $5.76
b)   Total revenue
   = 12.83(420) + 8.39(290) + 5.76(90)
   = 5388.60 + 2433.10 + 518.40
   = $8 340.10
   Total cost
   = 5550 + 0.23 (5550)
   = 5550 + 1267.50 = $6826.50
   Profit = 8340.10 - 6826.50 = $1513.60
c)    Total markup realized = 8340.10 - 5550 = $2970.10
   Average rate of markup based on selling price
   =   = 33.45%

Helpful!