Question

A company paid ​$203.00 for an item. The original price was​ $291.10​, but this was marked down 40​%. If the operating expenses are 36​% of the​ cost, find the operating loss and the absolute loss.

1. What is the operating loss?
2. What is the absolute loss?

Answer 1

Answer,:

Answer and Explanation: 1

1.

Calculation for operating loss is shown below:

Break-even point in dollars = Cost + Operating expenses

Break-even point in dollars = $208.40 + (36% * $208.40)

Break-even point in dollars = $208.40 + $ 75.024

Break-even point in dollars = $283.424

Reduced price = Original price - (Original price * Mark down)

Reduced price = $292.60 - ($292.60 * 40%)

Reduced price = $292.60 - $117.04

Reduced price = $175.56

Operating loss = Break-even point in dollars - Reduced price

Operating loss = $283.424 - $175.56

Operating loss = $107.864

2.

Calculation of absolute loss is shown below:

Absolute loss = Cost - Reduced price

Absolute loss = $208.40 - $175.56

Absolute loss = $32.84

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THIS ANSWER IS CORRECT