Assume that the retail price of the product is $85, the cost is $47, and the expenses are $13. Compute a new sale price using the formula for markdowns, assuming a 15 percent discount.
This is what I did, but I don't know where to incorporate the $13 expenses.
$85 retail price + $47 cost
$85 retail price – $47 cost = $38 markup / gross profit
Markdowns
$85 retail price x .15 discount = $12.75 markdown
$85 retail price – $12.75 markdown = $72.25 sale price
all you really need is the $85 price. A 15% discount gives $72.25
No mention is made of adjusting for profit or costs.
To compute the new sale price, you need to take into account the expenses as well. Here's how you can do it:
Step 1: Calculate the markup/gross profit
Subtract the cost from the retail price:
$85 (retail price) - $47 (cost) = $38 (markup/gross profit)
Step 2: Calculate the markdown
Multiply the retail price by the discount percentage (15%):
$85 (retail price) x 0.15 (discount) = $12.75 (markdown)
Step 3: Calculate the sale price
Subtract the markdown from the retail price, but also subtract the expenses:
$85 (retail price) - $12.75 (markdown) - $13 (expenses) = $59.25 (final sale price)
Therefore, the new sale price, considering both the discount and the expenses, would be $59.25.