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%

Question

Quizplus · 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.

M Studios Buys Cameras at a Unit Cost of $150