The markup rate of 35% means that the retailer wants to add 35% of the cost to the selling price in order to make a profit.
First, let's calculate the markup amount:
Markup = 35% * $2.27 = $0.7955
Next, let's calculate the selling price:
Selling price = Cost + Markup = $2.27 + $0.7955 = $3.07
Therefore, the selling price of the toy is $3.07.