A golf specialty store desires a minimum 40 percent markup for all of its golf sets and accessories.The retailer feels that a popular golf set should retail at $895.What is the maximum price the retailer can pay for the set?
A) $358.00
B) $398.00
C) $537.00
D) $577.00

Question

Quizplus · Accepted Answer

To achieve a minimum 40 percent markup on the retail price, the calculation is: Retail Price / (1 + Markup Percentage) = Cost Price. Therefore, $895 / (1 + 0.40) = $895 / 1.40 = $639. This means the maximum price the retailer can pay for the set to maintain at least a 40% markup is $639. However, since this option is not available, it appears there was a mistake in my calculation or interpretation of the options provided. The correct approach should be based on the information given and the options available. Let's correct this:To find the maximum price the retailer can pay for the set, we use the formula: Retail Price = Cost Price + (Markup Percentage * Cost Price). Rearranging this formula to solve for Cost Price gives us: Cost Price = Retail Price / (1 + Markup Percentage). Given a retail price of $895 and a desired markup of 40%, we calculate the maximum cost price as $895 / 1.40 = $639.29. Given the options and the mistake in the initial explanation, the correct approach involves understanding that a 40% markup on the cost means the cost constitutes 100% of its value, and the markup adds another 40% on top of it, making the retail price 140% of the cost. The calculation should directly address finding the cost price that allows for a 40% markup within the provided options, aligning with the formula: Cost Price = Retail Price / (1 + Markup Percentage). Since none of the provided options exactly match the corrected calculation, and acknowledging the error in the initial response, it's important to re-evaluate the options based on the correct understanding of markup calculation. The correct answer should reflect the maximum cost price that allows for at least a 40% markup based on the retail price of $895. Given the recalculated approach and the absence of the precise figure in the options, the intention was to select the option that best fits the scenario described, considering a 40% markup on the cost price.

A Golf Specialty Store Desires a Minimum 40 Percent Markup