The Mills Lunch Shop prepares fresh take-out entrees each day. On Tuesday, 40 baked chicken dinners were prepared at a cost of $3.20 each. A 20% spoilage rate is anticipated. Mills Lunch Shop sells the dinners at an 80% markup based on cost. They decided to offer a $1.00-off coupon in a newspaper advertisement. What markdown percentage does this coupon represent
cost: 40*3.20 = 128.00
after spoilage there are only 32 dinners to sell
Now, if the 32 dinners are supposed to cover the entire cost + 80% markup, that would mean they must sell at a price p such that
32p = 1.80*128
p = 7.20
So, the $1 discount is a 13.9% discount off the marked price.
To find the markdown percentage represented by the $1.00-off coupon, we need to calculate the original price of the baked chicken dinners.
The cost of each dinner is $3.20, and 40 dinners were prepared. Therefore, the total cost of the dinners is 40 * $3.20 = $128.
A 20% spoilage rate is anticipated, so the actual number of dinners available for sale is 40 - 20% of 40 = 40 - 0.2 * 40 = 40 - 8 = 32.
Mills Lunch Shop sells the dinners at an 80% markup, based on cost. So the selling price of each dinner is $3.20 + 80% of $3.20 = $3.20 + (80/100) * $3.20 = $3.20 + $2.56 = $5.76.
However, they decided to offer a $1.00-off coupon, so the selling price will be reduced to $5.76 - $1.00 = $4.76.
To find the markdown percentage, we can calculate the difference between the original selling price and the new selling price, divided by the original selling price, and multiplied by 100.
Markdown Percentage = ((Original Selling Price - New Selling Price) / Original Selling Price) * 100
= (($5.76 - $4.76) / $5.76) * 100
= ($1.00 / $5.76) * 100
= 17.3611...
Rounding to two decimal places, the markdown percentage represented by the $1.00-off coupon is approximately 17.36%.
To determine the markdown percentage represented by the $1.00-off coupon, we need to first calculate the selling price of the baked chicken dinners taking into account the cost, spoilage rate, and markup. Then we can compare the original selling price to the discounted selling price to find the markdown percentage.
Step 1: Calculate the total cost of the baked chicken dinners.
Total cost = Number of dinners * Cost per dinner
Total cost = 40 dinners * $3.20/dinner
Total cost = $128
Step 2: Determine the anticipated spoilage.
Spoilage = 20% of Total cost
Spoilage = 0.20 * $128
Spoilage = $25.60
Step 3: Calculate the total cost after spoilage.
Cost after spoilage = Total cost - Spoilage
Cost after spoilage = $128 - $25.60
Cost after spoilage = $102.40
Step 4: Calculate the selling price.
Selling price = Cost after spoilage + Markup
Selling price = $102.40 + 80% of Cost after spoilage
Selling price = $102.40 + 0.80 * $102.40
Selling price = $102.40 + $81.92
Selling price = $184.32
Step 5: Calculate the discounted selling price.
Discounted selling price = Selling price - Coupon amount
Discounted selling price = $184.32 - $1.00
Discounted selling price = $183.32
Step 6: Calculate the markdown amount.
Markdown amount = Selling price - Discounted selling price
Markdown amount = $184.32 - $183.32
Markdown amount = $1.00
Step 7: Calculate the markdown percentage.
Markdown percentage = (Markdown amount / Selling price) * 100%
Markdown percentage = ($1.00 / $184.32) * 100%
Markdown percentage ≈ 0.54%
Therefore, the $1.00-off coupon represents a markdown percentage of approximately 0.54%.