The Sweet Candy Shop buys 600 pounds of chocolate covered strawberries at $5.59 per pound. If a 10% spoilage rate is anticipated, at what price per pound should the strawberries be sold in order to achieve a 60% markup based on cost?
if sold at price p, we need the revenue from 90% of the 600 lbs to be 1.60 times the cost of 600 lbs at $5.59:
600(1-.10)p = 600*5.59*1.60
p = $9.94
$10.00
To find the selling price per pound, we need to consider the cost, the anticipated spoilage rate, and the desired markup.
Step 1: Calculate the cost of the chocolate covered strawberries.
Cost = Quantity * Price per pound
Cost = 600 pounds * $5.59 per pound
Cost = $3354
Step 2: Calculate the anticipated spoilage rate.
Spoilage Rate = 10% of Cost
Spoilage Rate = 10% * $3354
Spoilage Rate = $335.4
Step 3: Calculate the total cost after accounting for spoilage.
Total Cost = Cost + Spoilage Rate
Total Cost = $3354 + $335.4
Total Cost = $3689.4
Step 4: Calculate the desired markup on cost.
Markup on Cost = 60% of Total Cost
Markup on Cost = 60% * $3689.4
Markup on Cost = $2213.64
Step 5: Calculate the selling price per pound.
Selling Price per pound = Total Cost + Markup on Cost
Selling Price per pound = $3689.4 + $2213.64
Selling Price per pound = $5903.04
Therefore, the strawberries should be sold at a price of $5903.04 per pound to achieve a 60% markup based on cost.
To find the selling price per pound of the strawberries, we need to calculate the cost price per pound first.
1. Calculate the total cost of 600 pounds of strawberries by multiplying the quantity by the price per pound:
Total Cost = 600 pounds * $5.59/pound
2. Calculate the anticipated spoilage by multiplying the total quantity by the spoilage rate:
Spoilage = Total Quantity * Spoilage Rate
3. Subtract the spoilage from the total quantity to get the net quantity:
Net Quantity = Total Quantity - Spoilage
4. Calculate the cost price per pound by dividing the total cost by the net quantity:
Cost Price per Pound = Total Cost / Net Quantity
Now that we have the cost price per pound, we can calculate the selling price per pound to achieve a 60% markup based on cost:
5. Calculate the markup amount by multiplying the cost price per pound by the markup percentage (60%):
Markup Amount = Cost Price per Pound * 60%
6. Add the markup amount to the cost price per pound to get the selling price per pound:
Selling Price per Pound = Cost Price per Pound + Markup Amount
By following these steps, you can find the selling price per pound of the strawberries.