Question

Ross has an organic fair trade chocolate shop. He buys the chocolate from a wholesaler for $3/lb. He knows the wholesaler has a 20% margin. Ross would like to add another 20% margin himself. What is Ross' selling price?

A.$3.75
B.$3.60
C.None of the answer choices are correct
D.$4.32

Answer 1

Ross's selling price with an additional 20% margin on the $3/lb cost price from the wholesaler would be $3.60 per pound.

Step-by-step explanation:

To calculate Ross's selling price, we need to add a 20% margin to the cost price of $3/lb that he pays for the chocolate. Knowing that the wholesaler already adds a 20% margin to the cost, the cost to Ross is inclusive of this margin. Adding another 20% margin on Ross's cost will give us his selling price.

First, we need to calculate the 20% margin on Ross's cost:

• 20% margin of $3 = 0.20 × $3 = $0.60.
• Add this margin to the cost: $3 + $0.60 = $3.60.

Therefore, Ross's selling price would be $3.60.