The manufacturing costs incurred by Fred's Prints,a firm selling custom-designed T-shirts,are $10 per T-shirt,and the selling and distribution costs incurred are 6$ per T-shirt.To this total cost of $16,Fred adds a profit of $4 on each T-shirt and sells the T-shirt at $20.The markup here would be _____.

Question

Quizplus · Accepted Answer

The markup is the difference between the selling price and the cost price. In this case, the cost price is the sum of manufacturing costs and selling/distribution costs, which is $10 + $6 = $16. Adding a profit of $4 on top of this, the selling price is $16 + $4 = $20. Therefore, the markup is $20 - $16 = $4, which is option B.

The Manufacturing Costs Incurred by Fred's Prints,a Firm Selling Custom-Designed