Question

A retail store buys 125 VCRs from a distributor at a cost of $250 each plus an overhead charge of $35 per order. If the retail markup is 40% on the total price paid the profit on the sale of one VCR is $ A. , (round your answer to nearest cent)

Answer 1

To calculate the profit on the sale of one VCR, determine the cost price ($250), apply the retail markup of 40% to find the selling price ($350), and subtract the cost from the selling price to find the profit, which rounds to $100.00 per VCR.

Step-by-step explanation:

The question is about calculating the profit on the sale of a VCR for a retail store. Given the store buys each VCR at a cost of $250 and has an overhead charge of $35 per order, we first calculate the total cost per VCR. Since the overhead charge applies to the entire order, not per VCR, each VCR has a cost of $250. Next, we calculate the selling price by applying the retail markup of 40% on the total cost. The selling price is therefore $250 + ($250 × 40%) = $250 + $100 = $350. The profit per VCR is the difference between the selling price and the cost, which is $350 - $250 = $100. Since we need to round our answer to the nearest cent, the profit per VCR is $100.00.