Epicure Market prepares fresh gourmet entrees each day. On Wednesday, 80 baked chick dinners were made at a cost of $3.50 each. A 10% spoilage rate is anticipated.
Question 1: At what price should the dinner be sold to achieve 60% markup based on selling price?
Question 2: If Epicure offers a $1-off coupon in a newspaper advertisement, what markdown percent does the coupon represent?
#1
we want to find p such that
(80)(0.90)p = 80(3.50)(1.60)
#2
assuming the retail price p above, we want to find q such that
q = 1/p * 100
To answer both questions, we need to calculate the selling price and then compare it to the cost price. Let's break down the steps:
Question 1: To achieve a 60% markup based on the selling price, we need to calculate the selling price first.
1. Calculate the cost of each baked chicken dinner: $3.50.
2. Calculate the selling price by adding the markup percentage:
Selling Price = Cost Price + Markup
Markup = (Markup Percentage / 100) * Selling Price
Therefore, (Markup Percentage / 100) * Selling Price = Cost Price
3. Rearrange the equation to solve for Selling Price:
Selling Price = Cost Price / (1 - Markup Percentage / 100)
4. Substitute the given values and solve for Selling Price:
Selling Price = $3.50 / (1 - 60%)
Selling Price = $3.50 / 0.4
Selling Price = $8.75
So, the baked chicken dinner should be sold at a price of $8.75 to achieve a 60% markup based on the selling price.
Question 2: To find the markdown percentage represented by the $1-off coupon, we need to calculate the selling price with and without the coupon.
1. Calculate the selling price without the coupon:
Selling Price = Cost Price + Markup
Markup = (Markup Percentage / 100) * Selling Price
Therefore, (Markup Percentage / 100) * Selling Price = Cost Price
Rearrange the equation to solve for Selling Price:
Selling Price = Cost Price / (1 - Markup Percentage / 100)
Substitute the given values and solve for Selling Price:
Selling Price = $3.50 / (1 - 0.60)
Selling Price = $3.50 / 0.4
Selling Price = $8.75
2. Calculate the selling price with the coupon:
Selling Price with Coupon = Selling Price - $1
Selling Price with Coupon = $8.75 - $1
Selling Price with Coupon = $7.75
3. Calculate the markdown percentage:
Markdown Percentage = [(Selling Price - Selling Price with Coupon) / Selling Price] * 100
Substitute the values and solve for Markdown Percentage:
Markdown Percentage = [($8.75 - $7.75) / $8.75] * 100
Markdown Percentage = $1 / $8.75 * 100
Markdown Percentage ≈ 11.43%
Therefore, the $1-off coupon represents approximately an 11.43% markdown.