Mercola's Equipment Warehouse purchased equipment for resale at $2,420 less 9%, 44% and 13%. Mercola has operating expenses equal to 56% of the product cost. There is a 56% mark-up on the selling price. If Mercola wanted to break-even, then it would have to sell the equipment at $1,574.74 to break-even.

Question

Quizplus · Accepted Answer

To determine if the statement is false, we need to calculate the break-even selling price based on the given information. First, calculate the cost after discounts:1. Original price = $2,4202. After 9% discount = $2,420 - ($2,420 * 0.09) = $2,202.203. After an additional 44% discount = $2,202.20 - ($2,202.20 * 0.44) = $1,233.234. After a final 13% discount = $1,233.23 - ($1,233.23 * 0.13) = $1,072.91This $1,072.91 is the cost price. Operating expenses are 56% of this cost:Operating expenses = $1,072.91 * 0.56 = $601.23Total cost (product cost + operating expenses) = $1,072.91 + $601.23 = $1,674.14To break even, Mercola needs to sell the equipment for at least the total cost of $1,674.14, not $1,574.74 as stated. Therefore, the statement is false.

Mercola's Equipment Warehouse Purchased Equipment for Resale at $2,420 Less