Answer:
The rate of markdown is 0%. This means that the T-shirts are sold at the break-even price, with no discount applied.
Explanation:
To find the rate of markdown, we need to calculate the selling price of the T-shirts and then determine the percentage decrease from the original cost.
Let's break down the steps:
1. Start with the original cost of the T-shirts, which is $12.50.
2. To cover overhead, the retailer adds 40% of the cost. To calculate this overhead amount, multiply the cost by 0.40:
Overhead = $12.50 * 0.40 = $5.00
3. Add the overhead amount to the original cost to find the total cost:
Total cost = $12.50 + $5.00 = $17.50
4. To include the profit, the retailer adds 10% of the cost. To calculate this profit amount, multiply the cost by 0.10:
Profit = $17.50 * 0.10 = $1.75
5. Add the profit amount to the total cost to find the selling price:
Selling price = Total cost + Profit = $17.50 + $1.75 = $19.25
Now, we have the selling price of the T-shirts, which is $19.25.
6. To find the rate of markdown, we need to determine the percentage decrease from the original cost to the selling price. The markdown rate is calculated by dividing the markdown amount by the original cost and multiplying by 100%.
Markdown rate = ((Original cost - Selling price) / Original cost) * 100%
In this case, since we want to find the break-even price, the selling price should equal the original cost:
Markdown rate = ((Original cost - Original cost) / Original cost) * 100% = (0 / Original cost) * 100% = 0%