Posted by Liz on .
A local Dunkin donuts makes blueberry muffins that cost $.69 each to make. Past experience shows that 15% of the muffins will spoil and have to be discarded. Assuming this donut shop wants a 30% markup based on cost and produces 200 muffins, each muffin should sell for:
Answer: $1.06 What is the formula? How to solve this?
cost to make the 200 muffins = 200(.69) =$ 138
so profit with 30% markup = 1.3(138) = $179.4
but they can only sell 85% of the muffins or
.85(200) = 170
so selling price of each of the 170 muffins
= 179.4/170 = 1.055
They should sell each muffin at $1.06
I really did not use a "formula" since there was no variable defined .