Epicure Market prepares fresh gourmet entrees each day. On Wednesday, 80 baked chicken dinners were made at a cost of $3.50 each. A 10% spoilage rate is anticipated. At what price should the dinners be sold to achieve a 60% markup based on selling price?
(price of the dinner is $9.72)
Using the price per dinner, calculate the following. If Epicure offers a $1-off coupon in a newspaper advertisement, what markdown percent does the coupon represent? (Round percent to the nearest tenth.)
To find the price at which the dinners should be sold to achieve a 60% markup, we can follow these steps:
Step 1: Calculate the total cost of producing the dinners:
The cost of each baked chicken dinner is $3.50. Since 80 dinners were made, the total cost will be 80 * $3.50 = $280.
Step 2: Determine the anticipated spoilage rate:
The spoilage rate is given as 10%. To calculate the anticipated spoilage, we can multiply the total number of dinners by the spoilage rate: 80 * 0.10 = 8 dinners.
Step 3: Calculate the total cost of the spoiled dinners:
Since 8 dinners are anticipated to spoil, we can multiply the number of spoiled dinners by the cost per dinner: 8 * $3.50 = $28.
Step 4: Calculate the total cost of non-spoiled dinners:
Subtracting the cost of spoiled dinners from the total cost gives us the cost of non-spoiled dinners: $280 - $28 = $252.
Step 5: Calculate the desired selling price per dinner:
To achieve a 60% markup, we need to find the selling price that is 160% of the cost of non-spoiled dinners:
Selling price per dinner = 160% of the cost per dinner = 1.6 * $252 = $403.20.
Therefore, the dinners should be sold at a price of $403.20 to achieve a 60% markup.
Now, let's move on to the second part of the question.
If Epicure offers a $1-off coupon in a newspaper advertisement, we need to find the markdown percent represented by the coupon.
Step 6: Calculate the final selling price after applying the $1-off coupon:
Subtracting $1 from the selling price per dinner gives us the final selling price: $403.20 - $1 = $402.20.
Step 7: Calculate the markdown amount:
The markdown amount is the difference between the original price and the final selling price: $403.20 - $402.20 = $1.
Step 8: Calculate the markdown percent:
To calculate the markdown percent, we divide the markdown amount by the original price and multiply by 100:
Markdown percent = (Markdown amount / Original price) * 100 = ($1 / $403.20) * 100 ≈ 0.25%.
Therefore, the $1-off coupon represents a markdown percent of approximately 0.25%.