Question 1

A product costing $350, less 30%, 20%, and 10%, sells to allow for overhead expenses of 30% of the selling price and profit of 20% of the selling price. During a sale, the product is marked down by 40%. What is the final selling price?
A) $352.80
B) $211.68
C) $117.98
D) $86.43
E) $52.10

Accepted Answer

The product's original price is $350. The successive discounts of 30%, 20%, and 10% are applied first. The price after the first discount is $350 * 0.7 = $245. After the second discount, it's $245 * 0.8 = $196. After the third discount, it's $196 * 0.9 = $176.40. This is the price before adding overhead and profit. To find the selling price that includes a 30% overhead and a 20% profit on the selling price, we set up the equation $176.40 = S - 0.3S - 0.2S, where S is the selling price. Solving for S gives $176.40 = 0.5S, so S = $352.80. This is the price before the final 40% markdown. The final selling price after the 40% markdown is $352.80 * 0.6 = $211.68.

Question 2

M Studios buys cameras at a unit cost of $150. Their operating expense is 20% per unit of cost, and their desired unit operating profit is 30% of cost. What is M Studios' rate of mark-up on cost?
A) 33.3%
B) 20%
C) 50%
D) 30%
E) 25%

Accepted Answer

The mark-up on cost is calculated by adding the operating expense and desired profit, then dividing by the cost. Operating expense is 20% of $150, which is $30. Desired profit is 30% of $150, which is $45. So, the total mark-up is $75 on a cost of $150, resulting in a 50% mark-up on cost.

Question 3

A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. After three months, the set is reduced to $200. What is the selling price of the set?
A) $252.00
B) $315.00
C) $327.60
D) $390.60
E) $372.00

Accepted Answer

The answer of A dining room set costs $400, less...

Question 4

A shirt costing $30 was marked up by 150% and then reduced by 50%. What was the sale price?
A) $22.50
B) $60
C) $45
D) $37.50
E) $52.50

Accepted Answer

The shirt was first marked up by 150% of $30, which is $45, making the new price $75. Then, it was reduced by 50%, which is $37.50.

Question 5

M Studios buys cameras at a unit cost of $250. Their operating expense is 40% per unit of cost, and their desired unit operating profit is 30% of cost. What selling price should M Studios advertise for the camera?
A) $425
B) $350
C) $325
D) $320
E) $375

Accepted Answer

The total cost per unit including the operating expense is $250 + (40% of $250) = $250 + $100 = $350. The desired profit is 30% of the cost, which is 30% of $250 = $75. Therefore, the selling price should be $350 + $75 = $425.

Question 6

When does the discount period end?
A) March 26
B) April 15
C) April 16
D) April 21
E) none of these

Accepted Answer

The answer of When does the discount period end?
A) March...

Question 7

Parker Transport received a bill for $11,400 dated June 8 with payment terms of 3/15, n/45. What payment on June 22 would reduce the amount owing to $4,000?
A) $7,178
B) $7,058
C) $7,400
D) $3,880
E) $9,690

Accepted Answer

The payment terms 3/15, n/45 mean a 3% discount is available if paid within 15 days. Paying on June 22 qualifies for the discount. The discount is 3% of $11,400, which is $342. The discounted amount is $11,400 - $342 = $11,058. To reduce the amount owing to $4,000, Parker Transport needs to pay $11,058 - $4,000 = $7,058.

Question 8

Sally sent a cheque for $8,000 on June 15 in response to an invoice for $12,000 dated June 8 with terms 5/10, n/30. What balance did Sally still owe?
A) $4,000.00
B) $8,400.00
C) $3,578.95
D) $8,421.05
E) $3,600.00

Accepted Answer

Sally took the 5% discount by paying within 10 days, so she paid $12,000 x 0.95 = $11,400. She still owes $11,400 - $8,000 = $3,400.

Question 9

A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. After three months, the set is reduced to $200. What is the break-even price of the set?
A) $300.00
B) $390.60
C) $200.00
D) $325.00
E) $315.00

Accepted Answer

The break-even price is calculated by adding the overhead costs and operating profit to the reduced cost. The initial cost after discounts is $400 * 0.7 * 0.9 = $252. Overhead costs are 25% of $252, which is $63, and operating profit is 30% of $252, which is $75.60. Adding these to the reduced cost of $200 gives $200 + $63 + $75.60 = $338.60. However, the break-even price should cover the initial cost, so the closest option is $315.00.

Question 10

Calculate the retail price of an item for which the retailer paid $120 and applied a mark-up on cost of 30% of cost.
A) $150
B) $156
C) $168
D) $171
E) $189

Accepted Answer

The retail price is calculated by adding a 30% mark-up to the cost: $120 + (0.30 * $120) = $156.

Question 11

When does the credit period end?
A) March 26
B) April 15
C) April 16
D) April 21
E) none of these

Accepted Answer

The answer of When does the credit period end?
A) March...

Question 12

Mack the Mover received a bill for $7,490 dated April 17 with payment terms of 4/20, n/90. What payment on May 4 would reduce the amount owing to $2,500?
A) $4,990
B) $5,019
C) $5,992
D) $4,690
E) $4,790

Accepted Answer

The answer of Mack the Mover received a bill for...

Question 13

M Studios buys cameras at a unit cost of $125. Their operating expense is 45% per unit of cost, and their desired unit operating profit is 25% of cost. What is M Studios' rate of mark-up on selling price?
A) 60%
B) 45%
C) 25%
D) 41.2%
E) 40%

Accepted Answer

The mark-up on selling price is calculated by dividing the total profit by the selling price. The total cost per unit is $125, and the operating expense is 45% of this cost, which is $56.25. Therefore, the total cost including operating expense is $125 + $56.25 = $181.25. The desired profit is 25% of the cost, which is $31.25. So, the selling price must be $181.25 + $31.25 = $212.50. The mark-up on selling price is then the profit divided by the selling price: $31.25 / $212.50 = 0.147 or 14.7%. However, this calculation seems to have an error in interpreting the desired profit margin and its application. Let's correct the approach:The correct calculation should consider the desired operating profit as a markup on cost, and then find the markup percentage on the selling price. The cost is $125, and the operating expense is 45% of this, which is indeed $56.25, making the total cost $181.25 when considering the expense. However, the desired profit is not added on top of this sum in the manner previously described.Instead, the correct approach to find the selling price including a 25% profit on the cost (not on the total cost including operating expense) would be to calculate the profit as 25% of $125, which is $31.25, and add this to the original cost plus operating expense to find the intended selling price. However, the mistake lies in the interpretation of how the markup on the selling price is calculated, which should be based on the difference between the selling price and the total cost (cost plus operating expense), divided by the selling price.Given the confusion in the explanation and calculation, let's clarify the correct approach:1. Calculate the total cost including operating expense: $125 + ($125 * 45%) = $181.25.2. The desired profit is 25% of the cost, which is $31.25.3. The intended selling price to achieve this profit would be the cost plus the profit: $125 + $31.25 = $156.25.4. The markup on the selling price is then calculated as (Selling Price - Cost) / Selling Price. However, given the error in the profit calculation and its addition, the correct markup calculation was not provided based on the given options.The correct approach to find the markup on selling price involves correctly calculating the selling price to include the desired profit margin over the total cost and then applying the markup formula. Given the misunderstanding in the calculation provided, the correct answer should reflect the proper calculation of the selling price including a 25% profit margin on the cost and then finding the markup percentage based on that selling price. The correct markup calculation would involve determining the selling price that includes the operating expense and desired profit, then calculating the markup based on this selling price. However, without the correct final selling price calculation, the provided answer choice and explanation do not align correctly with the standard formula for markup on selling price.

Question 14

If Maury's Work Warehouse sets retail prices so that mark-ups are equal to 20% of cost, what is the cost of a pair of work boots that have a retail price of $129?
A) $108.00
B) $103.20
C) $101.91
D) $92.00
E) $86.50

Accepted Answer

The answer of If Maury's Work Warehouse sets retail prices...

Question 15

What is the cost of an item for which the retail selling price is $860 and the margin is 25% of the selling price?
A) $215
B) $688
C) $645
D) $445
E) $1,147

Accepted Answer

The margin is 25% of the selling price, so the cost is 100% - 25% = 75% of the selling price. 75% of $860 is $645.

Question 16

A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. After three months, the set is reduced to $200. What is the rate of markdown of the set?
A) 95.3%
B) 75.6%
C) 36.5%
D) 20.6%
E) 48.8%

Accepted Answer

The initial price after discounts is $400 * (1 - 0.30) * (1 - 0.10) = $252. The final price is $200. The markdown is calculated as (Original Price - Sale Price) / Original Price = ($252 - $200) / $252 = 20.6%. However, the correct calculation for the rate of markdown from the original price of $400 to the sale price of $200 is ($400 - $200) / $400 = 50%. None of the provided options accurately reflect this calculation, indicating a possible misunderstanding in the question's solution process. The closest option given the initial misunderstanding would be E) 48.8%, but this does not match the correct calculation from the original price.

Question 17

An invoice for $5,000 dated September 1 with terms 2/10, 1½/20, n/30 is received in the mail on September 3^rd. A payment of $2,000 is made on September 12^th. How much is credited to the account? A) $2,030 B) $2,000 C) $2,040 D) $1,970 E) $1,930.60

Accepted Answer

The payment is made within the 10-day discount period, so a 2% discount applies. The discount on $2,000 is $40, so $2,000 + $40 = $2,040 is credited to the account.

Question 18

If Clarington Sporting Goods has to pay $88 for a pair of skates and then they apply a mark-up of 40% of cost, what is the selling price?
A) $82
B) $89
C) $123
D) $147
E) $176

Accepted Answer

The mark-up on the skates is 40% of $88, which is $35.20. Adding this to the original cost ($88 + $35.20), the selling price is $123.20, rounded to $123.

Question 19

Acme Shoes marked up a pair of shoes from the $43.00 cost to $75.00. What is the rate of mark-up on cost?
A) 57.33%
B) 42.67%
C) 174.42%
D) 68.50%
E) 74.42%

Accepted Answer

The rate of mark-up on cost is calculated as ((Selling Price - Cost Price) / Cost Price) * 100. Here, it is (($75.00 - $43.00) / $43.00) * 100 = 74.42%.

Question 20

If a payment of $900 is made on March 20, what will be the new balance?
A) $918.00
B) $900.00
C) $918.37
D) $947.00
E) $946.63

Accepted Answer

The correct answer is E. The new balance is $946.63. The payment of $900 reduces the balance by $900, but interest is added to the balance from March 20 to the end of the month. The interest is calculated as follows: $946.63 x 0.015% x 10 days = $1.46. The new balance is $946.63 + $1.46 = $948.09.

Quiz 4: Mathematics of Merchandising

A product costing $350, less 30%, 20%, and 10%, sells to allow for overhead expenses of 30% of the selling price and profit of 20% of the selling price. During a sale, the product is marked down by 40%. What is the final selling price?

M Studios buys cameras at a unit cost of $150. Their operating expense is 20% per unit of cost, and their desired unit operating profit is 30% of cost. What is M Studios' rate of mark-up on cost?

A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. After three months, the set is reduced to $200. What is the selling price of the set?

A shirt costing $30 was marked up by 150% and then reduced by 50%. What was the sale price?

M Studios buys cameras at a unit cost of $250. Their operating expense is 40% per unit of cost, and their desired unit operating profit is 30% of cost. What selling price should M Studios advertise for the camera?

When does the discount period end?

Parker Transport received a bill for $11,400 dated June 8 with payment terms of 3/15, n/45. What payment on June 22 would reduce the amount owing to $4,000?

Sally sent a cheque for $8,000 on June 15 in response to an invoice for $12,000 dated June 8 with terms 5/10, n/30. What balance did Sally still owe?

A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. After three months, the set is reduced to $200. What is the break-even price of the set?

Calculate the retail price of an item for which the retailer paid $120 and applied a mark-up on cost of 30% of cost.

When does the credit period end?

Mack the Mover received a bill for $7,490 dated April 17 with payment terms of 4/20, n/90. What payment on May 4 would reduce the amount owing to $2,500?

M Studios buys cameras at a unit cost of $125. Their operating expense is 45% per unit of cost, and their desired unit operating profit is 25% of cost. What is M Studios' rate of mark-up on selling price?

If Maury's Work Warehouse sets retail prices so that mark-ups are equal to 20% of cost, what is the cost of a pair of work boots that have a retail price of $129?

What is the cost of an item for which the retail selling price is $860 and the margin is 25% of the selling price?

A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. After three months, the set is reduced to $200. What is the rate of markdown of the set?

An invoice for $5,000 dated September 1 with terms 2/10, 1½/20, n/30 is received in the mail on September 3rd. A payment of $2,000 is made on September 12th. How much is credited to the account?

If Clarington Sporting Goods has to pay $88 for a pair of skates and then they apply a mark-up of 40% of cost, what is the selling price?

Acme Shoes marked up a pair of shoes from the $43.00 cost to $75.00. What is the rate of mark-up on cost?

If a payment of $900 is made on March 20, what will be the new balance?

An invoice for $5,000 dated September 1 with terms 2/10, 1½/20, n/30 is received in the mail on September 3^rd. A payment of $2,000 is made on September 12^th. How much is credited to the account?