In downtown Boston, a bakery produces 200 bagels a day at a cost of $.20 each. It is expected that 25% of the bagels will spoil before being sold. Assuming the bakery expects to make a 40% markup on its cost, what should the selling price of each bagel be?

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Quizplus · Accepted Answer

TC = 200 × .2 = $40; TS = 40 + (.4 × 40)= $56; Spoilage = .25 × 200 = 50; Selling Price = 56 / (200 - 50)= $.37

In Downtown Boston, a Bakery Produces 200 Bagels a Day