The flour power bakery makes 200 cherry cheese cakes at a cost of 2.45 each. If a spoilage rate of 5% is anticipated at what price should the cakes be sold to achieve a 40% markup based on cost?
Well, it seems like the cherry cheese cakes are getting quite adventurous with their spoilage rate! I guess they just want to add a little excitement to the bakery.
To calculate the selling price with a 40% markup based on cost, we need to first determine the total cost of making the cakes.
200 cakes at a cost of $2.45 each gives us a total cost of $490.
Now, to account for the anticipated spoilage rate of 5%, we need to subtract 5% of the total cost from it.
5% of $490 is $24.50. We subtract $24.50 from $490, which gives us a new total cost of $465.50.
To achieve a 40% markup based on this cost, we need to add 40% of the cost to it.
40% of $465.50 is $186.20. Adding this amount to the cost gives us a target selling price of $651.70.
So, the cherry cheese cakes should be sold for approximately $651.70 to achieve a 40% markup based on cost. That should be enough to cover any unexpected adventures they decide to go on!
To determine the selling price of the cherry cheese cakes, we need to calculate the total cost and the desired markup based on the cost. Let's break it down step-by-step.
Step 1: Calculate the total cost of making 200 cherry cheese cakes.
Total cost = Cost per cake x Number of cakes
Total cost = $2.45 x 200
Total cost = $490
Step 2: Calculate the markup amount based on the cost.
Markup based on cost = Total cost x Markup rate
Markup based on cost = $490 x 40%
Markup based on cost = $490 x 0.40
Markup based on cost = $196
Step 3: Determine the total cost including the anticipated spoilage rate.
Total cost with spoilage = Total cost + (Total cost x Spoilage rate)
Total cost with spoilage = $490 + ($490 x 5%)
Total cost with spoilage = $490 + ($490 x 0.05)
Total cost with spoilage = $490 + $24.50
Total cost with spoilage = $514.50
Step 4: Calculate the selling price to achieve the desired markup.
Selling price = Total cost with spoilage + Markup based on cost
Selling price = $514.50 + $196
Selling price = $710.50
Therefore, the cherry cheese cakes should be sold for $710.50 each to achieve a 40% markup based on cost.
To find the selling price of the cherry cheese cakes, we need to calculate the cost per cake, including the anticipated spoilage rate. Here are the steps to calculate it:
Step 1: Calculate the total cost of making 200 cakes:
Total Cost = Cost per cake * Number of cakes
Total Cost = $2.45 * 200
Total Cost = $490
Step 2: Determine the cost per cake with the anticipated spoilage rate:
Cost per cake (including spoilage) = Total Cost / (Number of cakes - Spoilage rate)
Cost per cake (including spoilage) = $490 / (200 - 0.05 * 200)
Cost per cake (including spoilage) = $490 / (200 - 10)
Cost per cake (including spoilage) = $490 / 190
Cost per cake (including spoilage) ≈ $2.58
Step 3: Calculate the selling price to achieve a 40% markup based on cost:
Markup = Cost per cake * Markup percentage
Markup = $2.58 * 40%
Markup = $2.58 * 0.4
Markup = $1.032
Selling Price = Cost per cake + Markup
Selling Price ≈ $2.58 + $1.032
Selling Price ≈ $3.61
Therefore, the cherry cheese cakes should be sold at approximately $3.61 each to achieve a 40% markup based on cost.