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Home Q & A Board Science-Related Homework Help Mathematics
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Lada Lada
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6 years ago
Unique Furniture bought coffee tables for $399.00 less 23%, 10%, 5.5%. The store's overhead expenses come out to be 30% of regular selling price and the target profit is 55% of regular selling price.
a) What is the maximum rate of markdown that the store can offer to break even?
b) What is the realized rate of markup based on cost if the items are sold at the break-even price?
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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#1
6 years ago
a) C = 399 (1 - 0.23)(1 - 0.1)(1 - 0.055)
   = 261.30
S = 261.3 + 0.3S + 0.55S
0.15S = 261.3
S = $1 742.00
   
Break-even price = 261.30 + 0.3(1742)
   = 261.3 + 522.6
   = 783.9
Maximum markdown = 1742 - 783.9 = $958.10
Max. markdown rate = 958.1/1742 = 55.0%

b) Markup realized = 783.9 - 261.3 = $522.60
Rate of markup realized based on cost = 522.60/261.30 = 200.00%
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