REVIEW EXERCISES
|
CHAPTER 8—SECTION I
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
television set
bookcase
automobile
dress
vacuum cleaner
hat
computer
treadmill
1 lb potatoes
wallet
Item
$.58
$25.69
$46.25
$1,350.00
$1,455.00
$75.00
$156.22
$161.50
$32.40
$6,944.80
Cost
$880.00
$.75
$19.26
$50.00
$2,149.00
$21.50
$5,400.00
$60.00
$93.73
$138.45
Amount of
Markup
$44.95
$3,499.00
$2,335.00
$1.33
$249.95
$96.25
$12,344.80
$135.00
$299.95
$53.90
130%
75%
80%
60%
108.1%
159.2%
60.5%
85.7%
66.4%
77.8%
Percent Markup
Selling Price Based on Cost
For the following items, calculate the missing information, rounding dollars to the nearest cent and percents to the nearest tenth percent:
T8-1
T8-2
REVIEW EXERCISES | CHAPTER 8—SECTION I
1. M 5 SP 2 C 5 299.95 2 161.50 5 $138.45
M
138.45
%MC 5
5
5 .8572 5 85.7%
C
161.50
2. SP 5 C 1 M 5 32.40 1 21.50 5 $53.90
M
21.50
%MC 5
5
5 .6635 5 66.4%
C
32.40
3. C 5 SP 2 M 5 12,344.80 2 5,400.00 5 $6,944.80
M
5400.00
%MC 5
5
5 .7775 5 77.8%
C
6944.80
4. SP 5 C(100% 1 %MC) 5 75(100% 1 80%) 5 75(1.8) 5 $135.00
M 5 SP 2 C 5 135.00 2 75.00 5 $60.00
249.95
SP
249.95
5
5 $156.22
5
100% 1 %MC
100% 1 60%
1.6
M 5 SP 2 C 5 249.95 2 156.22 5 $93.73
5. C 5
6. SP 5 C 1 M 5 46.25 1 50.00 5 $96.25
M
50.00
%MC 5
5
5 1.081 5 108.1%
C
46.25
7. M 5 SP 2 C 5 3,499.00 2 1,350.00 5 $2,149.00
2,149.00
M
5
5 1.592 5 159.2%
%MC 5
C
1,350.00
8. C 5 SP 2 M 5 2,335.00 2 880.00 5 $1,455.00
M
880.00
%MC 5
5
5 .6048 5 60.5%
C
1,455.00
9. SP 5 C(100% 1 %MC) 5 .58(100% 1 130%) 5 .58(2.3) 5 $1.33
M 5 SP 2 C 5 1.33 2 .58 5 $.75
SP
44.95
44.95
5
5
5 $25.69
100% 1 %MC
100% 1 75%
1.75
M 5 SP 2 C 5 44.95 2 25.69 5 $19.26
10. C 5
REVIEW EXERCISES
|
CHAPTER 8—SECTION I
SP 5 C 1 M 5 56.10 1 29.80 5 $85.90
11. Alarm clocks cost the manufacturer $56.10 per unit to produce. If a markup of $29.80
is added to the cost, what is the selling price per clock?
Solve the following word problems, rounding dollars to the nearest cent and percents
to the nearest tenth:
T8-3
T8-4
REVIEW EXERCISES | CHAPTER 8—SECTION I
19. A department store sells refrigerators at retail for $875.88. If a 50% markup based on
cost is added, what is the cost of the refrigerator?
C5
SP
875.88
875.88
5
5
5 $583.92
100% 1 %MC
100% 1 50%
1.5
T8-5
REVIEW EXERCISES | CHAPTER 8—SECTION I
T8-6
BUSINESS DECISION | CHAPTER 8—SECTION I
KEYSTONE MARKUP
24. In department and specialty store retailing, a common markup strategy is to double
the cost of an item to arrive at a selling price. This strategy is known as keystoning
the markup, and is widely used in apparel, cosmetics, fashion accessories, shoes, and
other categories of merchandise.
The reasoning for the high amount of markup is that these stores have particularly high operating expenses. In addition, they have a continuing need to update fixtures and remodel stores to attract customers.
You are the buyer in the women’s shoe department of the Roma Grande department store. You normally keystone your markups on certain shoes and handbags.
This amount of markup allows you enough gross margin so that you can lower prices
when “sales” occur, and still have a profitable department.
a. If you are looking for a line of handbags that will retail for $120, what is the most
you can pay for the bags?
$60.00
b. At a women’s wear trade show, you find a line of handbags that you like with a
suggested retail price of $130.00. The vender has offered you trade discounts of
30/20/5. Will this series of trade discounts allow you to keystone the handbags?
Need cost of $65.00
130(.7)(.8)(.95)5$69.16
No—Cost too high
c. The vender tells you that the first two discounts, 30% and 20%, are fixed, but the
5% is negotiable. What trade discount, rounded to a whole percent, should you
ask for, in order to keystone the markup?
Reasoning: Solve for a third discount in the trade discount series that yields a single
equivalent discount of 50% or more (Chapter 7, Performance Objective 7-8). This
will allow the markup to be keystoned.
Let X 5 Complement of discount needed
(.7)(.8)X 5 .5
.56X 5 .5
X 5 .893 Discount needed 5 100 2 .893 5 10.7 5 11%
REVIEW EXERCISES
|
CHAPTER 8—SECTION II
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
sink
textbook
telephone
bicycle
magazine
flashlight
doll house
1 qt. milk
truck
sofa
fan
drill
Item
$94.74
$71.25
$1.18
$15,449.00
$584.55
$.79
$9,468.74
$714.45
$50.00
$17.06
$61.36
$80.10
$65.00
$34.44
$75.00
$53.40
Cost
Amount of
Markup
$1,299.00
$165.99
$1.97
$24,917.74
$133.50
$51.50
$136.36
$115.00
Selling Price
150%
88.7%
60%
53.8%
133%
66.9%
61.3%
122.2%
Percent
Markup
Based
on Cost
47%
38%
55%
60%
35%
57.1%
40.1%
45%
60%
37.5%
43.5%
33.1%
Percent
Markup
Based on
Selling Price
For the following items, calculate the missing information, rounding dollars to the nearest cent and percents to the nearest tenth:
T8-7
T8-8
REVIEW EXERCISES | CHAPTER 8—SECTION I I
1. SP 5 C 1 M 5 65.00 1 50.00 5 $115.00
50.00
M
%MSP 5
5
5 .4347 5 43.5%
SP
115.00
2. M 5 SP 2 C 5 51.50 2 34.44 5 $17.06
17.06
M
5
5 .3312 5 33.1%
%MSP 5
SP
51.50
C
75.00
75.00
5
5
5 $136.36
100% 2 %MSP
100% 2 45%
.55
M 5 SP 2 C 5 136.36 2 75.00 5 $61.36
3. SP 5
4. C 5 SP(100% 2 %MSP) 5 133.50(100% 2 60%) 5 133.50(.4) 5 $53.40
M 5 SP 2 C 5 133.50 2 53.40 5 $80.10
5. %MSP 5
%MC
60%
.6
5
5
5 .375 5 37.5%
100% 1 %MC
100% 1 60%
1.6
6. %MC 5
%MSP
.35
35%
5
5 .5384 5 53.8%
5
100% 2 %MSP
100% 2 35%
.65
7. M 5 SP 2 C 5 165.99 2 71.25 5 $94.74
M
94.74
%MC 5
5
5 1.3296 5 133%
C
71.25
M
94.74
%MSP 5
5
5 .5707 5 57.1%
SP
165.99
8. SP 5 C 1 M 5 1.18 1 .79 5 $1.97
M
.79
%MC 5
5
5 .6694 5 66.9%
C
1.18
.79
M
5
5 .4010 5 40.1%
%MSP 5
SP
1.97
T8-9
REVIEW EXERCISES | CHAPTER 8—SECTION I I
15,449.00
15,449.00
C
5
5 $24,917.74
5
100% 2 %MSP
100% 2 38%
.62
M 5 SP 2 C 5 24,917.74 2 15,449.00 5 $9,468.74
9,468.74
M
5
5 .6129 5 61.3%
%MC 5
C
15,449.00
9. SP 5
10. C 5 SP(100% 2 %MSP) 5 1,299.00(100% 2 55%) 5 1,299(.45) 5 $584.55
M 5 SP 2 C 5 1,299.00 2 584.55 5 $714.45
M
714.45
%MC 5
5
5 1.2222 5 122.2%
C
584.55
11. %MSP 5
12. %MC 5
%MC
1.5
150%
5
5 .60 5 60%
5
100% 1 %MC
100% 1 150%
2.5
%MSP
.47
47%
5
5 .8867 5 88.7%
5
100% 2 %MSP
100% 2 47%
.53
T8-10
REVIEW EXERCISES | CHAPTER 8—SECTION I I
T8-11
REVIEW EXERCISES | CHAPTER 8—SECTION I I
T8-12
REVIEW EXERCISES | CHAPTER 8—SECTION I I
T8-13
BUSINESS DECISION
|
CHAPTER 8—SECTION II
REVIEW EXERCISES
|
CHAPTER 8—SECTION III
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
fish tank
sneakers
cantaloupe
CD player
1 yd carpet
suitcase
chess set
necklace
copier
pen
Item
$1,599.88
$21.20
$68.00
$115.77
$390.00
$264.95
$41.10
$189.95
$53.88
$1.68
Original
Selling Price
$35.50
$155.00
$559.96
$5.30
$.39
$79.48
$16.44
$16.01
$28.50
$16.38
Amount of
Markdown
$15.90
$235.00
$1,039.92
$24.66
$51.99
$80.27
$37.50
$1.29
$185.47
$161.45
Sale Price
35%
25%
30%
40%
23.5%
30.7%
39.7%
15%
30.4%
23.2%
Markdown
Percent
For the following items, calculate the missing information, rounding dollars to the nearest cent and percents to the nearest tenth:
T8-14
T8-15
REVIEW EXERCISES | CHAPTER 8—SECTION I I I
1. Sale price 5 Original price 2 Markdown 5 189.95 2 28.50 5 $161.45
MD
28.50
MD% 5
5
5 .1500 5 15%
Original price
189.95
2. MD 5 Original price 2 Sale price 5 53.88 2 37.50 5 $16.38
16.38
MD
5
5 .3040 5 30.4%
MD% 5
Original price
53.88
3. Original sale price 5 Sale price 1 MD 5 1.29 1 .39 5 $1.68
MD
.39
MD% 5
5
5 .2321 5 23.2%
Original price
1.68
4. Sale price 5 Original price(100% 2 MD%) 5 264.95(.7) 5 $185.47
MD 5 Original price 2 Sale price 5 264.95 2 185.47 5 $79.48
Sale price
24.66
24.66
5
5
5 $41.10
100% 2 MD%
100% 2 40%
.6
MD 5 Original price 2 Sale price 5 41.10 2 24.66 5 $16.44
5. Original price 5
6. MD 5 Original price 2 Sale price 5 68.00 2 51.99 5 $16.01
MD
16.01
MD% 5
5
5 .2354 5 23.5%
Original price
68.00
7. Sale price 5 Original price 2 MD 5 115.77 2 35.50 5 $80.27
35.50
MD
5
5 .3066 5 30.7%
MD% 5
Original price
115.77
8. Original price 5 Sale price 1 MD 5 235.00 1 155.00 5 $390.00
155.00
MD
5
5 .3974 5 39.7%
MD% 5
Original price
390.00
9. Sale price 5 Original price(100% 2 MD%) 5 1,599.88(.65) 5 $1,039.92
MD 5 Original price 2 Sale price 5 1,599.88 2 1,039.92 5 $559.96
Sale price
15.90
15.90
5
5
5 $21.20
100% 2 MD%
100% 2 25%
.75
MD 5 Original price 2 Sale price 5 21.20 2 15.90 5 $5.30
10. Original price 5
T8-16
REVIEW EXERCISES | CHAPTER 8—SECTION I I I
Solve the following word problems, rounding dollars to the nearest cent and percents
to the nearest tenth:
11. A motorcycle that originally sold for $9,700 was marked down and sold for $7,950.
a. What is the amount of the markdown?
MD 5 Original price 2 Sale price 5 9,700.00 2 7,950.00 5 $1,750.00
b. What is the markdown percent?
1,750.00
MD
5
5 .1804 5 18.0%
MD% 5
Original price
9,700.00
12. A set of glasses that originally sold for $34.88 was marked down by $12.11.
a. What is the sale price?
Sale price 5 Original price 2 MD 5 34.88 2 12.11 5 $22.77
b. What is the markdown percent?
MD% 5
MD
12.11
5
5 .3471 5 34.7%
Original price
34.88
13. a. A notebook that originally sold for $1.69 was marked down to $.99. What is the
amount of the markdown on these notebooks?
MD 5 Original price 2 Sale price
MD 5 1.69 2 .99 5 $.70
b. What is the markdown percent?
MD% 5
.70
MD
5
5 .4142 5 41.4%
Original price
1.69
c. If the sale price is then marked up by 40%, what is the new selling price?
SP 5 .99(1.4)5 $1.39
T8-17
REVIEW EXERCISES
|
CHAPTER 8—SECTION III
T8-18
REVIEW EXERCISES
|
CHAPTER 8—SECTION III
T8-19
REVIEW EXERCISES
|
CHAPTER 8—SECTION III
T8-20
REVIEW EXERCISES
|
CHAPTER 8—SECTION III
T8-21
REVIEW EXERCISES | CHAPTER 8—SECTION I I I
T8-22
REVIEW EXERCISES | CHAPTER 8—SECTION I I I
T8-23
BUSINESS DECISION | CHAPTER 8—SECTION I I I