Icelandic skis are marked up 75% on cost. What is the equivalent rate of markup based on selling price?
let the cost price be x
then selling price = 1.75x
profit = .75x
rate based on selling price
= .75x/1.75x = 75/175 = .42847.. or appr 42.8%
To determine the equivalent rate of markup based on the selling price, we need to understand two things: the markup on cost and the selling price formula.
First, let's calculate the markup on cost. If Icelandic skis are marked up 75% on cost, it means that the selling price is 175% of the cost price.
To calculate the selling price formula, we use the following equation:
Selling Price = Cost Price + Markup
In this case, the selling price is given by:
Selling Price = Cost Price + Markup on Cost
Selling Price = Cost Price + (75% * Cost Price)
To find the equivalent rate of markup based on the selling price, we need to rearrange the equation to isolate the markup on cost:
Markup on Cost = Selling Price - Cost Price
Substituting the values into the equation, we have:
Markup on Cost = (Cost Price + (75% * Cost Price) - Cost Price
Markup on Cost = 75% * Cost Price
Now, to calculate the equivalent rate of markup based on the selling price, we divide the markup on cost by the selling price:
Equivalent Rate of Markup = (Markup on Cost / Selling Price) * 100
Substituting the values we calculated earlier into the equation, we get:
Equivalent Rate of Markup = ((75% * Cost Price) / (Cost Price + (75% * Cost Price))) * 100
Simplifying further, we have:
Equivalent Rate of Markup = (0.75 / (1 + 0.75)) * 100
Equivalent Rate of Markup = (0.75 / 1.75) * 100
Equivalent Rate of Markup = 0.42857 * 100
Equivalent Rate of Markup = 42.857%
Therefore, the equivalent rate of markup based on selling price for Icelandic skis is approximately 42.857%.