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April 16, 2014

April 16, 2014

Posted by **Tha** on Monday, August 10, 2009 at 11:45pm.

(a) At what price per bag should the dog food be sold?

(b) At this price, what is the rate of markup on cost?

(c) What is the break-even price?

- Math -
**MathMate**, Tuesday, August 11, 2009 at 8:58amArithmetic is used to solve the problem although algebra can also be used.

Cost price = $19.50- 19.50*0.40 = $11.70

The selling price includes

- 33 1/3 % of overhead

- 10 % of profit

So the fraction of cost in selling price

= 100% - 33 1/3 - 10 = 56 2/3%

Therefore selling price

= cost / fraction of cost

= $11.70 / (56 2/3%)

= $11.70 / (170/300)

= $11.70 * 300/170

= $20.65

Check:

Profit (10%) = 20.65*0.1 = $2.07

Overhead (33 1/3%) = 20.65*(1/3)= 6.88

Cost price = 20.65-2.07-6.88=11.70

So the answer is correct.

- Math -
**MathMate**, Tuesday, August 11, 2009 at 9:00am(b) the mark-up on cost is the profit divided by the cost price. It should be different from 33 1/3%.

(c) the break even price is the selling price less the profit, i.e. zero profit.

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