Question

A jewelry store marks up diamond sales 150%. A diamond ring is priced $2,400. Determine the wholesale price ( jewelry store's cost ) of the ring the commission paid to a sales associate who earns a 5% commission on the retail price ( customer's price ) of the ring and the profit that the store makes on the ring if ? State the three amounts and explain how you determined the profit. ( You may write a math statement to show the solution for the profit. )

Answer 1

The wholesale price of the ring is $960.00, the commission paid to the sales associate is $120.00, and the profit that the store makes on the ring is $1,320.00.

Step-by-step explanation:

To determine the wholesale price (jewelry store's cost) of the diamond ring, we need to calculate the original price (customer's price) of the ring. The jewelry store marks up diamond sales by 150%, so the original price is $2,400 / (1 + 150%) = $960.00.

To determine the commission paid to the sales associate, we use the customer's price of $2,400 and multiply it by the 5% commission rate: $2,400 x 5% = $120.00.

To determine the profit that the store makes on the ring, we subtract the wholesale cost of $960.00 and the commission of $120.00 from the retail price of $2,400. This gives us the profit: $2,400 - $960 - $120 = $1,320.00.

Therefore, the three amounts are:

1. The wholesale price (jewelry store's cost) of the ring is $960.00
2. The commission paid to the sales associate is $120.00
3. The profit that the store makes on the ring is $1,320.00