Question

A storere sells CD's for $15 CDs for 15. If the unit cost per CD is $11 what is the stores markup on the selling price? 

a 66% B 73% C 27% D 22%

Answer 1

The correct answer would be option C, 27%.

Step-by-step explanation:

Difference between the Cost of the product and the Selling Price of that product is called the Markup on selling Price. In this example, a store keeper sells CDs at a price of $15. But the cost of each CD is $11, which means, he takes $4 profit on each CD sold. So the markup on selling price can be calculated as follows:

Markup on Selling Price = ( (Selling Price - Cost of the Product) / Selling Price) * 100

Markup on Selling Price = ( ($15 - $11) / $15 ) *100

Markup on Selling Price = ( $4 / $15 ) * 100

Markup on Selling Price = 0.27 *100

Markup on Selling Price = 27%

Answer 2

Answer: c. 27%

The purpose of markup percentage is to find the ideal sales price of a product. For example, if the CD costs $11 each, and the selling price is $15, then the store’s markup on the unit cost is 4/11 or 37% while store’s mark up on selling price is 4/15 or 27%.