Maria is looking for the best deal on a designer handbag that has a wholesale price of $479. Help her compare the price of the handbag in different situations by completing the following.
(a) Maria can buy the handbag from a distributor that does direct-to-customer sales. When selling directly to individual customers, this distributor marks up the wholesale price 60%. Ignoring tax, how much would Maria pay for the handbag if she gets it from this distributor?
$
(b) Maria can also go to a boutique that she knows has the handbag. This boutique gets it from a distributor who marks up the wholesale price 10%. Then the boutique marks it up by an additional 50%. Ignoring tax, how much would Maria pay for the handbag at this boutique?
$
(c) Select the true statement.
Maria would pay more for the handbag if she gets it directly from the distributor.
Maria would pay more for the handbag if she gets it at the boutique.
Maria would pay the same amount if she gets the handbag from the distributor or at the boutique.
(a) Maria would pay $766.40 for the handbag if she gets it from the direct-to-customer sales distributor ((1 + 0.6) * $479 = $766.40).
(b) Maria would pay $1018.60 for the handbag at the boutique ([(1 + 0.1) * $479] * 1.5 = $1018.60).
(c) Maria would pay more for the handbag if she gets it at the boutique.
(a) To calculate the price Maria would pay if she gets the handbag from the distributor that does direct-to-customer sales, we need to add 60% markup to the wholesale price of $479.
The markup amount will be 60% of $479, which is equal to (60/100) * $479 = $287.40.
Therefore, Maria would pay $479 + $287.40 = $766.40 for the handbag if she gets it from this distributor.
(b) To calculate the price Maria would pay for the handbag at the boutique, we need to consider the markup by the distributor and the additional markup by the boutique.
The distributor marks up the wholesale price of $479 by 10%. The markup amount will be 10% of $479, which is equal to (10/100) * $479 = $47.90.
Now, the distributor sells the handbag to the boutique for $479 + $47.90 = $526.90.
Next, the boutique marks up this price by an additional 50%. The markup amount will be 50% of $526.90, which is equal to (50/100) * $526.90 = $263.45.
Therefore, Maria would pay $526.90 + $263.45 = $790.35 for the handbag at this boutique.
(c) The true statement is: Maria would pay more for the handbag if she gets it at the boutique.