Question

The selling price of a set of bed linens is $119.50. The cost is $44.78. The overhead expense is 40% of the selling price. Find the markup, overhead, net profit, and net profit rate.

a) Markup: $74.72, Overhead: $47.80, Net Profit: $27.18, Net Profit Rate: 22.7%
b) Markup: $74.72, Overhead: $47.80, Net Profit: $27.18, Net Profit Rate: 20%
c) Markup: $74.72, Overhead: $47.80, Net Profit: $71.72, Net Profit Rate: 60%
d) Markup: $74.72, Overhead: $47.80, Net Profit: $71.72, Net Profit Rate: 40%

Answer 1

To calculate the markup, overhead, net profit, and net profit rate, use the given information. The markup is $74.72, the overhead is $47.80, the net profit is $27.18, and the net profit rate is 22.7%.

Step-by-step explanation:

To find the markup, overhead, net profit, and net profit rate, we can use the given information. The selling price is $119.50 and the cost is $44.78. The overhead expense is 40% of the selling price.

Markup = Selling Price - Cost = $119.50 - $44.78 = $74.72

Overhead = 40% of Selling Price = 0.40 * $119.50 = $47.80

Net Profit = Selling Price - Cost - Overhead = $119.50 - $44.78 - $47.80 = $27.18

Net Profit Rate = (Net Profit / Selling Price) * 100 = ($27.18 / $119.50) * 100 = 22.7%