M Studios buys cameras at a unit cost of $200. Their operating expense is 35% per unit of the selling price, and their desired unit operating profit is 25% of the selling price. What selling price should M Studios advertise for the camera?
A) $320
B) $500
C) $250
D) $270
E) $425

Question

Quizplus · Accepted Answer

The selling price can be calculated by setting up the equation based on the given percentages for operating expense and desired profit, both of which are based on the selling price (SP). Let's denote the selling price as SP. The operating expense is 35% of SP, and the desired profit is 25% of SP. The cost is $200. The equation representing the situation is: $200 (cost) + 0.35SP (operating expense) + 0.25SP (profit) = SP. Solving this equation for SP gives us the selling price of $500.

M Studios Buys Cameras at a Unit Cost of $200