Asked by Byron Sherwin on Jun 30, 2024
Verified
A pair of shoes listed at $70 less 20% is purchased by a merchant who sells them for $98. What is the merchant's rate of mark-up on selling price?
A) 42.86%
B) 75%
C) 40%
D) 28.57%
E) 6623%66 \frac{2}{3} \%6632%
Mark-up
An increase in the original price of items meant to compensate for overhead expenditures and ensure profit.
Selling Price
The amount of money for which a product or service is sold to the consumer.
- Master the calculation of mark-up rates and identification of selling prices in business environments.
- Scrutinize the impact that discounts, markdowns, and operating expenses have on the pricing structure of products.
Verified Answer
MA
Madley AlexandreJul 05, 2024
Final Answer :
A
Explanation :
The shoes were listed at $70 and sold at a 20% discount, so the purchase price is $70 - ($70 * 20%) = $70 - $14 = $56. The merchant then sells them for $98. The mark-up on the selling price is calculated as (Selling Price - Cost Price) / Selling Price. So, the mark-up rate is ($98 - $56) / $98 = $42 / $98 = 0.4286 or 42.86%.
Learning Objectives
- Master the calculation of mark-up rates and identification of selling prices in business environments.
- Scrutinize the impact that discounts, markdowns, and operating expenses have on the pricing structure of products.