The usual retail price of an item is $100. The manufacturers cost to produce the
ID: 464716 • Letter: T
Question
The usual retail price of an item is $100. The manufacturers cost to produce the item is $40. Retailers take a 50 percent markup and wholesalers take a 10 percent markup (markup is calculated on selling price, unless otherwise is indicated).
What is the retailers markup in dollars?______________________________
What is the wholesale price?_______________________________________
What is the manufacturers price?___________________________________
What is the manufacturers markup percentage?_______________________
The XYZ Manufacturing Company is trying to set its price on a product that will sell at retail for $80.
For retailers to earn a markup of 25 percent, what should the wholesale price be? ________________________
For the wholesalers to earn a markup of 10 percent, what should the manufacturers price be? _________________________
Explanation / Answer
The usual retail price of an item is $100. The manufacturers cost to produce the item is $40. Retailers take a 50 percent markup and wholesalers take a 10 percent markup (markup is calculated on selling price, unless otherwise is indicated).
What is the retailers markup in dollars?
Retail Price = whole Sale price + 50% of wholesale price ( here 50% is the markup)
100/1.5 = wholesale price = $66.66
So, retailers markup = 100 66.66 = 33.33
What is the wholesale price?
Wholesale price = $66.66
What is the manufacturers price?
Wholesales take 10% markup on manufacture price.
Whole sale price = Manufacturer price + 10% of Manufacturer price
Manufacturer Price = 66.66/1.1 = $ 60.6
What is the manufacturers markup percentage?
manufacturers markup percentage = (60.6 40)/40 = 20.6/40 = 51.5 %
2.
The XYZ Manufacturing Company is trying to set its price on a product that will sell at retail for $80.
For retailers to earn a markup of 25 percent, what should the wholesale price be?
Retail Price = Wholesale price + 25% of wholesale price
80=wholesale price*(1.25)
Wholesale price = 80/1.25 = $64
For the wholesalers to earn a markup of 10 percent, what should the manufacturers price be?
Wholesale price = Manufacturer price + 10% of Manufacturer price
Manufacturer price = 64/1.1 = $58.18
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