Deck 12: Markups and Markdowns: Perishables and Breakeven Analysis

Question 1

The selling price can be calculated if the cost and the percent markup on cost are given.

Answer 1

True

Question 2

Actual cost is equal to the cost times the markup percent on cost plus 1.

Answer 2

False

Question 3

The amount of markup is represented as the portion only when markups are based on cost.

Answer 3

False

Question 4

Percent markup on the selling price is equal to the amount of markup divided by the selling price.

Question 5

Cost is equal to the selling price divided by (1 + markup percent on cost) when markup is based on cost.

Question 6

Operating expenses are the unusual expense of doing business.

Question 7

Gross profit plus operating expenses equals net income.

Question 8

Percent markup on selling price can be converted to percent markup on cost by formula.

Question 9

Selling price = cost - markup.

Question 10

Dollar markup divided by the selling price equals percent markup on cost.

Question 11

Markup represents an amount needed to cover operating expenses.

Question 12

Selling price times 1 minus markup percent on selling price will equal the cost if markup is based on selling price.

Question 13

Dollar markdowns represent price increases to the original selling price.

Question 14

If the selling price and percent markup on selling price are given, the actual cost can be calculated.

Question 15

When markups are based on cost, the selling price is 100%.

Question 16

When markup is based on selling price, the cost is 100%.

Question 17

Gross profit is net sales minus the cost of bringing merchandise into the store.

Question 18

The markdown percent is the amount of markdown divided by the new sale price.

Question 19

When markup is based on selling price, the cost is the base.

Question 20

A final selling price may be the result of a series of markdowns (and possibly some markups).

Question 21

Setting a price on perishable items does not include:

A) Calculating total cost
B) Calculating total selling price
C) Calculating a selling price per day
D) Calculating a selling price per pound
E) None of these

Question 22

If percent markup on cost and selling price are known, one is able to compute the:

A) Amount of markdown
B) Amount of spoilage
C) Cost
D) Selling price at wholesale
E) None of these

Question 23

Breakeven point is fixed cost divided by contribution margin.

Question 24

Markdowns may be caused by:

A) Lack of seasonal changes
B) Lack of special promotions
C) Style changes
D) Decreased competition
E) None of these

Question 25

Markup is:

A) Selling price + cost
B) Selling price divided by cost
C) Selling price - cost
D) Selling price * (1 + cost)
E) None of these

Question 26

J.C. Penney sells a Timex watch for $139.99 that cost $89.97. J.C. Penney's percent of markup based on the selling price is:

A) 35.56%
B) 35.57%
C) 35.73%
D) 37.52%
E) none of these

Question 27

To place a price on perishable items, there is no need to calculate the total cost as well as total selling price of the items.

Question 28

An Apple iPod sells for $299, which is marked up 40% of the selling price. The cost of the iPod is:

A) $197.40
B) $179.40
C) $149.70
D) $194.70
E) None of these

Question 29

When markups are based on the selling price, the:

A) Selling price is the portion
B) Selling price is 100%
C) Selling price is cost - markup
D) Selling price is 100% + cost percent
E) None of these

Question 30

A local True Value Hardware Store marks its goods up 38% on cost. If a snow blower cost True Value $400, the selling price would be:

A) $525.00
B) 552.00
C) 542.00
D) 452.00
E) None of these

Question 31

When markup is based on cost:

A) Cost is the portion
B) Markup is the rate
C) Cost is equal to selling price
D) Cost is 100%
E) None of these

Question 32

Gap sells jeans that cost $21.00 for a selling price of $29.95. The percent of markup based on cost is:

A) 42.62%
B) 46.26%
C) 49.88%
D) 48.9%
E) None of these

Question 33

A computer sells for $995, which is marked up 35% of the selling price. The cost of the computer is:

A) $1,343.25
B) 1,433.52
C) 1,350.77
D) 1,530.77
E) None of these

Question 34

(1 + markup percent on cost) * cost equals:

A) Cost at wholesale
B) Cost at retail
C) Selling price
D) Markup
E) None of these

Question 35

The markdown percent is calculated by:

A) Amount of markdown divided by sale price
B) Amount of markdown divided by original selling price
C) Sale price divided by amount of markdown
D) Original selling price divided by amount of markdown
E) None of these

Question 36

Jay King, owner of a local Bed and Bath store, knows that his customers will pay at most $299 for a blow-up bed. Assuming Jay wants a 40% markup on the selling price, the most he could pay the manufacturer for the blow-up bed is:

A) $197.04
B) $179.04
C) $104.65
D) $179.40
E) None of these

Question 37

Bill's Furrier marks up mink coats $3,000. This represents a 50% markup on cost. What is the cost of the coats?

A) $1,500
B) 6,000
C) 4,500
D) 9,000
E) None of these

Question 38

Net income is calculated as:

A) Net sales + costs - operating expenses
B) Net sales - costs - operating expenses
C) Net sales + costs + operating expenses
D) Net sales - costs + operating expenses
E) None of these

Question 39

Ski Market sells snowboards. Ski Market knows that the most people will pay for the snowboards is $129.99. Ski Market is convinced that it needs a 45% markup based on cost. The most that Ski Market can pay to its supplier for the snowboards is:

A) $98.65
B) $96.65
C) $88.65
D) $87.65
E) None of these

Question 40

Contribution margin is selling price plus unit cost.

Question 41

At the end of the summer, Walgreens advertised blow-up pools for 66% off the regular price. Jeff Jones saw a pool with a regular price of $49.99. The dollar markdown is:

A) $39.29
B) $32.99
C) $33.99
D) $33.39
E) None of these

Question 42

Pat Maninan, a customer of Brown Co., will pay $400 for a new kitchen table. Brown has a 55% markup on the selling price. What is the most Brown can pay for this kitchen table?

Question 43

Munroe Corporation sells Nautilus equipment for $399.95. Munroe marks up the equipment 30% on the selling price. What did the equipment cost Munroe? Round to the nearest cent.

Question 44

A local Dunkin' Donuts makes blueberry muffins that cost $.69 each. Past experience shows that 15% of the muffins will spoil and have to be discarded. Assuming that this shop wants a 30% markup based on cost and produces 200 muffins, each muffin should sell for:

A) $.90
B) $.91
C) $1.50
D) $1.06
E) None of these

Question 45

A video game sells at Arnolds for $14.99. Arnolds marks the game up at 40% of the selling price. The cost of the video game to Arnold is:

A) $6.00
B) $8.99
C) $6.50
D) $9.10
E) None of these

Question 46

Jackie Smith, a customer of Roger Blank, will pay only $190 for a tennis racket. Assuming Roger works on a 60% markup on the selling price, the most Roger will pay the manufacturer is:

A) $76
B) $114
C) $67
D) $141
E) None of these

Question 47

Belle's Bake Shop makes croissants that cost $1.75 each. Past experience shows that 10% of the croissants will spoil and have to be discarded. Assuming Belle wants a 45% markup based on cost and produces 300 croissants, each croissant should sell for:

A) $2.28
B) $2.54
C) $2.45
D) $2.82
E) None of these

Question 48

Jingle Corporation produces toy footballs. Each football sells for $9.95 with a variable unit cost of $7.10. Assuming a fixed cost of $11,400 what is Jingle's breakeven point?

Question 49

A wooden duck with a regular selling price of $125.99 is marked down to $79.99. The percent of markdown is:

A) 57.51%
B) 36.51%
C) 35.61%
D) 55.71%
E) None of these

Question 50

Bill Angel marks up his goods 38% on cost. A Nikon camera cost Bill $410. What is Bill's selling price?

Question 51

Contribution margin is:

A) Net sales
B) Revenues plus variable cost
C) Revenues minus variable cost
D) Revenues divided by fixed cost
E) None of these

Question 52

Zales bought a tea set for $1,400. Zales wants to mark up the set 55% of the selling price. The selling price of the tea set should be:

A) $2,030
B) $2,300
C) $3,111.11
D) $3,111.10
E) None of these

Question 53

Talbot's sells ladies sport coats for $99.99 that cost $65.50. What is the percent markup on cost? Round to nearest hundredth percent. Verify the cost.

Question 54

Fathers' Day suits were advertised for 35% off the regular price. A suit regularly sells for $210. The amount of the markdown is:

A) $37.50
B) $136.50
C) $73.50
D) $163.50
E) None of these

Question 55

French Co. marks up its goods 45% on cost. What is French's equivalent markup on selling price? Round to the nearest hundredth percent.

Question 56

A local Dot Dress Shop is selling a suit for $99. Because of changing styles, the first markdown was 8% and second markdown was 25%. The suit still did not sell, so a final markdown of 10% was taken. The sale price is currently:

A) $68.31
B) $86.31
C) $61.84
D) $61.48
E) None of these

Question 57

Lester Co. produces toys kites. It has a fixed cost of $62,150. If the selling price per unit is $9.50 and the variable cost per unit is $6.25, the breakeven point is:

A) $9,207
B) 6,542
C) 22,600
D) 29,860
E) None of these

Question 58

Camille Keegan sells lamps for $105.55 that cost her $75.00. Camille's percent of markup based on the selling price is:

A) 38.9%
B) 28.94%
C) 40.73%
D) 40.37%
E) None of these

Question 59

Bill's Hardware marks up snow blowers $130 and sells them for $485. Markup is on cost. What are the cost and percent markup to the nearest hundredth percent?

Question 60

Mr. Small, the store manager for Jay's Appliance, is having a difficult time placing a selling price on a refrigerator that cost $410. Mr. Small knows his boss would like to have a 45% markup based on cost. The selling price should be:

A) $745.45
B) $754.54
C) $594.50
D) $549.50
E) None of these

Question 61

Question 62

Blue Jeans, Inc., sells jeans that cost $15.99 for a selling price of $42.95. What is the percent of markup based on cost? (Round to the nearest hundredth percent.)

Question 63

Selling price $500
Markup % on cost 40%
Actual cost?

Question 64

Al Shelf knows his goods are marked up 36% on cost. If a TV cost Al $280, what would the selling price be? .

Question 65

Question 66

Question 67

Question 68

Francis's Bakeshop makes cupcakes that cost $.95 each. Francis knows that 20% of the cupcakes will spoil. Assume Francis wants a 35% markup on cost and produces 60 cupcakes. What should Francis charge for each cupcake? Round to the nearest cent.

Question 69

Question 70

A toaster is marked up $10 and sells for $45.00. Find the cost and percent markup if the markup is based on cost. (Round to the nearest hundredth percent.)

Question 71

Question 72

Al's Hat Shop bought a hat for $95. Al wants to mark up the hat by 55% of the selling price. What should the selling price of the hat be?

Question 73

Question 74

Convert a 40% markup percent on cost to markup percent on selling price. (Round to the nearest hundredth percent.) .

Question 75

Question 76

Convert a 30% markup percent on cost to markup percent on selling price. (Round to the nearest hundredth percent.)

Question 77

A. If the cost of a TV is $120 and it sells for $200, what is the percent of markup based on cost? Round to the nearest hundredth percent.
B. Check your answer.

Question 78

Find the cost and markup of a stove if it sells for $400 and is marked up 100% of the cost.

Question 79

26% markup on selling price
Actual cost $700
Selling price?

Question 80

Selling price $700
Markup % on cost 30%
Actual cost?