Question

Brownsville, Texas, boasts being the southernmost international seaport and the largest city in the lower Rio Grande Valley. Ben Supple, an importer in Brownsville, has just received a shipment of Peruvian opals that he is pricing for sale. He paid $160 for the shipment. Assume he wants a 68% markup. Required: Calculate the selling price when the markup is based on the selling price and calculate the selling price when the markup is based on cost.

Answer 1

The selling price with a 68% markup based on the selling price is $500, while the selling price with a 68% markup based on cost is $268.80.

Step-by-step explanation:

The student in Brownsville, Texas wants to calculate the selling price for a shipment of Peruvian opals with a 68% markup based on both the selling price and on the cost.

To find the selling price when the markup is based on the selling price, we need to use the formula: Selling Price = Cost / (1 - Markup Percentage). In this case, this translates to Selling Price = $160 / (1 - 0.68), which simplifies to Selling Price = $160 / 0.32 = $500.

For the markup based on cost, the formula is: Selling Price = Cost + (Cost x Markup Percentage). Plugging in the numbers gives us: Selling Price = $160 + ($160 x 0.68) = $160 + $108.80 = $268.80.