High Meadow Mfg. Co. sold its product through wholesalers and retailers-allowing the wholesalers a markup of 25 percent and retailers a markup of 40 percent. If the retail selling price is $100 and the manufacturer's cost is $30, what markup in dollars did High Meadow receive on the sale of this product?
A) $5.00
B) $13.50
C) $15.00
D) $10.00
E) $20.00

Question

Quizplus · Accepted Answer

First, we need to calculate the selling price to the wholesalers. We know that they are allowed a markup of 25%, so we can calculate:

$30 + ($30 * 0.25) = $37.50

Next, we need to calculate the selling price to the retailer, which includes their markup of 40%. We can calculate:

$37.50 + ($37.50 * 0.40) = $52.50

Finally, we know that the retail selling price is $100, so we can calculate the markup that High Meadow received:

$100 - $52.50 = $47.50

Therefore, the markup in dollars that High Meadow received on the sale of this product is $47.50, which is answer choice C.