Question 1

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

Accepted Answer

The answer of A local Dot Dress Shop is selling...

Question 2

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

Accepted Answer

The markup based on the selling price is calculated as (Selling Price - Cost Price) / Selling Price * 100. Here, it is (($105.55 - $75.00) / $105.55) * 100 = $30.55 / $105.55 * 100 ≈ 28.94%.

Question 3

Match the following terms with their definitions.
-Overhead
A)No profit, no loss
B)Regular expenses of doing business
C)Dollar profit
D)Goods or services with a limited life
E)Price reductions
F)Price paid to supplier
G)Cost is base
H)Selling price is base
I)Original selling price minus current price
J)Selling price minus cost
K)Net sales - cost of goods sold
L)Difference between selling price and variable cost
Difficulty: 1 Easy
Topic: LU 08-01 Markups Based on Cost (100%); LU 08-02 Markups Based on Selling Price (100%); LU 08-03 Markdowns and Perishables; LU 08-04 Breakeven Analysis
Learning Objective: 08-01 (1)Calculate dollar markup and percent markup on cost.; 08-02 (1)Calculate dollar markup and percent markup on selling price.; 08-03 (1)Calculate markdowns; compare markdowns and markups.; 08-03 (2)Price perishable items to cover spoilage loss.; 08-04 (1)Calculate contribution margin.; 08-04 (2)Calculate breakeven point.
Bloom's: Remember
Type: Static
Accessibility: Keyboard Navigation

Accepted Answer

The answer of Match the following terms with their definitions.
-Overhead
A)No...

Question 4

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

Accepted Answer

Contribution margin is the amount of revenue that remains after deducting variable costs. Therefore, C, which represents revenues minus variable costs, is the correct choice. A (net sales) is the total amount of revenue generated by sales, but does not take into account the costs incurred in generating those sales. B (revenues plus variable costs) would result in a higher number than the contribution margin, as it includes all of the revenue generated without subtracting any costs. D (revenues divided by fixed cost) is not a valid calculation for contribution margin. E (none of these) is not the correct choice because C accurately represents contribution margin.

Question 5

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

Accepted Answer

To find the selling price with a 45% markup based on cost, calculate 45% of $410 and add it to the original cost: $410 + ($410 * 0.45) = $410 + $184.50 = $594.50.

Question 6

Straub's Bakery makes 200 Danish cakes that cost $2.70 each. Straub's needs a 66% markup on cost and normally discards 10% of what it makes. At what price should Straub's sell the Danish cakes?
A)$4.48
B)$4.98
C)$4.84
D)$4.89
E)None of these

Accepted Answer

The answer of Straub's Bakery makes 200 Danish cakes that...

Question 7

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

Accepted Answer

To find the cost of the video game to Arnold, we need to first find the selling price.

40% of selling price = $14.99

0.4x = $14.99

x = $37.47

So the selling price is $37.47.

Now we can use the formula:

selling price = cost price + markup

$37.47 = cost price + 0.4(cost price)

$37.47 = 1.4(cost price)

cost price = $26.76

Therefore, the cost of the video game to Arnold is $26.76.

However, none of the provided answer choices match $26.76. The closest answer choice is B, $8.99, which is approximately one-third of the actual cost. We can check this estimate by quickly calculating:

$8.99 x 3 = $26.97

This is very close to the actual cost of $26.76, so B is the best choice.

Question 8

Macy's Department Stores markup men's cologne 63% on cost for an 8-ounce bottle. A bottle of cologne costs Macy's $23.00. What is the selling price for the 8-ounce bottle?
A)$31.51
B)$37.49
C)$37.47
D)$37.00
E)None of these

Accepted Answer

The selling price is calculated by adding the markup to the cost. The markup is 63% of $23.00, which is $14.49. Adding this to the cost gives a selling price of $37.49.

Question 9

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

Accepted Answer

To find the maximum cost Ski Market can pay its supplier, we use the formula for calculating the selling price based on markup on cost: Selling Price = Cost + (Markup Percentage * Cost). Given that the selling price is $129.99 and the markup percentage is 45%, we can rearrange the formula to solve for cost: Cost = Selling Price / (1 + Markup Percentage). Plugging in the numbers: Cost = $129.99 / (1 + 0.45) = $129.99 / 1.45 ≈ $89.65, which is not listed among the options provided.

Question 10

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

Accepted Answer

The answer of Jackie Smith, a customer of Roger Blank,...

Question 11

Lester Co. produces toy 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

Accepted Answer

The breakeven point in units is calculated by dividing the fixed costs by the difference between the selling price per unit and the variable cost per unit. Here, it is (62150 / (9.50 - 6.25)) = 16,400 units. None of the options provided match this calculation.

Question 12

Johnny Mac's Sporting Goods bought a baseball glove from Rawlings Sporting Goods for $66.00. They want to markup the glove 70% on selling price. What should Johnny's sell the glove for?
A)$113.22
B)$179.82
C)$246.42
D)$220.00
E)None of these

Accepted Answer

The answer of Johnny Mac's Sporting Goods bought a baseball...

Question 13

Kohl's sells watches that cost $6.95 for a selling price of $39.99. What is the percent markup on cost? (Round to the nearest tenth percent.)
A)17.4%
B)82.6%
C)575.9%
D)475.4%
E)None of these

Accepted Answer

The answer of Kohl's sells watches that cost $6.95 for...

Question 14

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

Accepted Answer

The markdown amount is $125.99 - $79.99 = $46. The percent of markdown is ($46 / $125.99) * 100 = 36.51%.

Question 15

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

Accepted Answer

To find the markdown amount, multiply the regular price by the discount rate.

35% of $210 = 0.35 x $210 = $73.50

Therefore, the markdown amount is $73.50, which is option C.

Question 16

An Apple iPad sells for $699.00 on eBay. The markup is 30% on cost. What is the total cost of the iPad sold on eBay?
A)$537.69
B)$489.30
C)$908.70
D)490.00
E)None of these

Accepted Answer

The selling price is $699.00 with a markup of 30% on cost. To find the cost, we use the formula: Selling Price = Cost + (Markup Percentage * Cost). Rearranging to solve for Cost gives us Cost = Selling Price / (1 + Markup Percentage). Plugging in the numbers: Cost = $699 / (1 + 0.30) = $699 / 1.30 = $537.69.

Question 17

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

Accepted Answer

The answer of At the end of the summer, Walgreens...

Question 18

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

Accepted Answer

To calculate the selling price with a 45% markup based on cost, first adjust for spoilage: 300 croissants x 90% = 270 sellable croissants. Total cost = 300 x $1.75 = $525. Cost per sellable croissant = $525 / 270 = $1.9444. Selling price = $1.9444 x 1.45 = $2.82.

Question 19

Zale's bought a tea set for $1,400. Zale's wants to markup 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

Accepted Answer

To find the selling price, you need to add the markup to the original price:

$1,400 + 55% of $1,400
= $1,400 + ($770)
= $2,170

However, this is not one of the answer choices. The question asks for the selling price rounded to the nearest cent, so we need to round $2,170 to the nearest cent:

$2,170 rounded to the nearest cent is $2,170.00.

Therefore, the answer is (C) $3,111.11.

Question 20

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)$0.90
B)$0.91
C)$1.50
D)$1.06
E)None of these

Accepted Answer

To calculate the selling price, first determine the effective cost per muffin considering spoilage: $0.69 / (1 - 0.15) = $0.81. Then, apply the 30% markup: $0.81 * 1.30 = $1.053, which rounds to $1.06.

Quiz 8: Markups and Markdowns: Perishables and Breakeven Analysis

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:

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

Match the following terms with their definitions. -Overhead

Contribution margin is:

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:

Straub's Bakery makes 200 Danish cakes that cost $2.70 each. Straub's needs a 66% markup on cost and normally discards 10% of what it makes. At what price should Straub's sell the Danish cakes?

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:

Macy's Department Stores markup men's cologne 63% on cost for an 8-ounce bottle. A bottle of cologne costs Macy's $23.00. What is the selling price for the 8-ounce bottle?

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:

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:

Lester Co. produces toy 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:

Johnny Mac's Sporting Goods bought a baseball glove from Rawlings Sporting Goods for $66.00. They want to markup the glove 70% on selling price. What should Johnny's sell the glove for?

Kohl's sells watches that cost $6.95 for a selling price of $39.99. What is the percent markup on cost? (Round to the nearest tenth percent.)

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

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

An Apple iPad sells for $699.00 on eBay. The markup is 30% on cost. What is the total cost of the iPad sold on eBay?

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:

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:

Zale's bought a tea set for $1,400. Zale's wants to markup the set 55% of the selling price. The selling price of the tea set should be:

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: