Question

A firm pays ​$52 for a car seat and wants a 34​% markup for operating expenses as well as a 6​% markup for profit.​ However, customers think the car seats are​ ugly, so they are not selling. Management reduces the price of each car seat by ​$25 to get rid of them.

Find ​(a) the selling​ price,
​(b) the reduced​ price,
​(c) the percent of​ markdown,
and ​(d) any operating or absolute loss.

Answer 1

• See below

Explanation:

Initial cost = $52

Markup for operting expences = 34%

• $52 + 34% = $52*1.34 = $69.68

Markup for profit = 6%

• 69.68 + 6% = 69.68*1.06 = 73.86 (rounded)

a) The selling price is $73.86

b) The reduced price is:

• $73.86 - $25 = $48.86

c) The percent of markdown:

• 25/73.86*100% = 33.85% (rounded)

d) The absolute loss:

• $69.68 - $48.86 = $20.82