Question

4. Assume a manufacturer makes an item that costs $2.50 to produce. The

markup when sold to the distributor is 35 percent. What is the cost to the
distributor? When the distributor sells the item to the retailer, the markup is 40
percent. How much will the retailer pay for the item?

Answer 1

Answer: Cost to distributer $3.38

Cost to retailer $4.73

Step-by-step explanation: First find 35 percent of $2.50

2.50 x 0.35 = 0.875 this is 35% of 2.50

Then add this amount to 2.50

2.50 + 0.875 = 3.375 or $3.38

Then to find the cost to the retailer repeat this process with 40%

3.38 x 0.40 = 1.352

1.352 + 3.38. = 4.732 or $4.73