Asked by Conner Reiss on May 06, 2024
Verified
It costs a company $6 to manufacture a product. It sells the product for $10 to a wholesaler who in turn sells it to a retailer for $12. A customer of the retailer buys it for $24. What was the markup on selling price for each member of this product's channel of distribution?
A) Manufacturer's markup = 40 percent; wholesaler's markup = 16.67 percent; retailer's markup = 50 percent
B) Manufacturer's markup = 48 percent; wholesaler's markup = 18 percent; retailer's markup = 45 percent
C) Manufacturer's markup = 60 percent; wholesaler's markup = 20 percent; retailer's markup = 100 percent
D) Manufacturer's markup = 66.67 percent; wholesaler's markup = 20 percent; retailer's markup = 100 percent
E) Manufacturer's markup = 60 percent; wholesaler's markup = 23 percent; retailer's markup = 40 percent
Markup on Selling Price
The amount added to the cost price of goods to cover overhead and profit; the difference between the selling price and the product's cost.
Channel of Distribution
The path or process through which goods and services travel from the producer or provider to the end user or customer.
Wholesaler's Markup
The percentage added to the cost of goods by wholesalers when they sell to retailers, to cover costs and generate profit.
- Familiarize yourself with the essential aspects and computation techniques of discounts and markups in sales contexts.
Verified Answer
Learning Objectives
- Familiarize yourself with the essential aspects and computation techniques of discounts and markups in sales contexts.
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