Working off an 21% margin, with markups based on cost, the Food Co-op Club boasts that they have 5,800 members and a 240% increase in sales. The markup is 48% based on cost.
What would be their percent markup if selling price were the base? (Round your answer to the nearest hundredth percent. Omit the "%" sign in your response.)
To find the percent markup if the selling price were the base, we need to calculate the markup amount and then divide it by the selling price.
First, let's calculate the selling price using the given information. We know that the markup is 48% based on cost, so the selling price can be calculated as follows:
Selling Price = Cost + Markup
Selling Price = Cost + (Markup Percentage * Cost)
Selling Price = (1 + Markup Percentage) * Cost
Since the markup is 48% based on cost, the selling price would be:
Selling Price = (1 + 0.48) * Cost
Selling Price = 1.48 * Cost
Next, let's calculate the markup amount using the 21% margin and the 240% increase in sales. The markup amount is the difference between the selling price and the cost:
Markup Amount = Selling Price - Cost
To calculate the selling price, we need to find the cost. The cost can be calculated using the formula:
Cost = Selling Price / (1 + Margin Percentage)
Given that the margin is 21%, the cost can be calculated as:
Cost = Selling Price / (1 + 0.21)
Cost = Selling Price / 1.21
Now we can substitute the value of Selling Price to find the Cost:
Cost = (1.48 * Cost) / 1.21
Simplifying the equation gives us:
Cost = 1.48 * Cost / 1.21
To solve for Cost, we can multiply both sides of the equation by 1.21:
1.21 * Cost = 1.48 * Cost
Subtracting 1.48 * Cost from both sides gives us:
0.27 * Cost = 0
Dividing both sides by 0.27 gives us:
Cost = 0
From here, we can see that the cost is zero, which means there is no markup or price on the product. Therefore, the markup percentage if the selling price were the base is also zero.
So, the percent markup if selling price were the base is 0%.