Sullivan's Handbags marks up their bags at 45% of the selling price. Pat Sullivan saw a bag at a trade show that would sell for her customers for $85. What is the most she would pay for the bag and still retain the 45% markup of the selling price?
I came up with 84.99 please check my answer.
5. What is the most she can pay for the bag and still retain 45% markup of the selling price? $46.75
Sells to customer $85.00 Trader 0.45x100x$85 = 38.25 $85.00 -$38.25 = $46.75
To find the most Pat Sullivan would pay for the bag and still retain the 45% markup, we need to work backwards from the selling price.
Let's assume the cost price of the bag is x.
The selling price would be the cost price plus the markup:
Selling Price = Cost Price + Markup
The markup is 45% of the selling price, so:
Markup = 0.45 * Selling Price
Substituting the selling price of $85:
Markup = 0.45 * $85
Markup = $38.25
Now, we can rewrite the equation for the selling price:
$85 = x + $38.25
Rearranging the equation, we find the cost price:
x = $85 - $38.25
x = $46.75
Therefore, Pat Sullivan can pay up to $46.75 for the bag and still retain the 45% markup. Your answer of $84.99 is incorrect.
To determine the most Pat Sullivan would pay for the bag while retaining a 45% markup, we can follow these steps:
Step 1: Identify the selling price
The selling price is given as $85.
Step 2: Calculate the cost price
To find the cost price, we need to divide the selling price by 1 + markup percentage. In this case, the markup percentage is 45%, which is equivalent to 0.45.
Cost Price = Selling Price / (1 + Markup Percentage)
Cost Price = $85 / (1 + 0.45)
Cost Price = $85 / 1.45
Cost Price ≈ $58.62
Hence, the cost price of the bag is approximately $58.62.
Therefore, to retain the 45% markup, Pat Sullivan should pay no more than the cost price, which is approximately $58.62.
Your answer of $84.99 is not correct as it is higher than the cost price.