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 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? Round to nearest tenth of a percent

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1. Cost = 40*3.20 + 0.2*40*3.26 = \$153.60

P=153.6 + 0.8*153.6 = \$276.48 = Selling
price for 40 dinners.

276.48/40 = \$6.91 Each.

(6.91-1.00)/6.91 = 85.5%

% Markdown = 100%-85.5% = 14.5%

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posted by Henry
2. Correction:

Cost = 40 * 3.20 = \$128

A = 128 + 0.8*128 = \$230.40 = Amt. to be

(40-8)dinners * \$D/dinner = 230.40
32D = 230.40
D = \$7.20/dinner.

(7.20-1.00)/7.20 = 0.861 = 86.1%

% Markdown = 100 - 86.1 = 13.9

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posted by Henry

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