A retailer has planned operating expenses of 44 percent of planned sales and a planned profit of 6 percent of sales.What markup percentage at retail does the retailer require?
A) 38 percent
B) 44 percent
C) 50 percent
D) The answer cannot be determined based on the information provided.

Question

Quizplus · Accepted Answer

To determine the markup percentage at retail, we need to use the following formula:

Markup % at retail = (Profit % + Operating expenses %) / (100% - Operating expenses %)

Substituting the given values, we get:

Markup % at retail = (6% + 44%) / (100% - 44%) = 50%

Therefore, the retailer requires a markup percentage of 50% at retail to achieve their planned profit and cover their operating expenses. Thus, the best choice is C.

A Retailer Has Planned Operating Expenses of 44 Percent of Planned