if a grocery store buys 30 gallons of milk at a cost of $1.58 per gallon, he anticipates a 15% spoilage rate , to achieve a 20% markup based on selling price what should it be
I say $ 2.19 per gallon
if a grocery store buys 30 gallons of milk at a cost of $1.58 per gallon, he anticipates a 15% spoilage rate , to achieve a 20% markup based on selling price what should it be
I say $ 2.19 per gallon
To find the selling price per gallon that would give a 20% markup based on selling price, we first need to calculate the cost price per gallon including the anticipated spoilage rate.
Step 1: Calculate the total cost of purchasing 30 gallons of milk.
Cost per gallon = $1.58
Total cost = 30 gallons * $1.58 = $47.40
Step 2: Calculate the cost per gallon after accounting for the anticipated spoilage rate of 15%.
Spoilage rate = 15%
Effective quantity = 100% - 15% = 85%
Effective cost per gallon = Total cost / Effective quantity
Effective cost per gallon = $47.40 / 85% = $55.76
Step 3: Calculate the selling price per gallon to achieve a 20% markup based on selling price.
Mark-up rate = 20%
Mark-up rate as a decimal = 20% / 100% = 0.20
Selling price per gallon = Cost price per gallon * (1 + Mark-up rate)
Selling price per gallon = $55.76 * (1 + 0.20) = $55.76 * 1.20 = $66.91
The selling price per gallon should be approximately $66.91 to achieve a 20% markup based on selling price.