A. . Epicure Market prepares fresh gourmet entrees each day. On Wednesday, 80 baked chicken dinners were made at a cost of $3.50 each. A 10% spoilage rate is anticipated. At what price should the dinners be sold to achieve a 60% markup based on selling price?
B.Using the price per dinner that you determined in the previous question, calculate the following. If Epicure offers a $1-off coupon in a newspaper advertisement, what markdown percent does the coupon represent? (Round percent to the nearest tenth.)
Epicure Market prepares fresh gourmet entrees each day. On Wednesday, 80 baked chicken dinners were made at a cost of $3.50 each. A 10% spoilage rate is anticipated. At what price should the dinners be sold to achieve a 60% markup based on selling price?
To solve both questions, we'll break them down step by step.
A. To find the selling price that achieves a 60% markup based on selling price, we need to calculate the cost per dinner and then determine the selling price.
Step 1: Calculate the total cost for the 80 baked chicken dinners.
Total cost = Cost per dinner * Number of dinners
Total cost = $3.50 * 80 = $280
Step 2: Account for the anticipated spoilage rate.
Spoilage rate = 10% = 0.10
Adjusted total cost = Total cost / (1 - Spoilage rate)
Adjusted total cost = $280 / (1 - 0.10) = $280 / 0.90 = $311.11 (rounded to the nearest cent)
Step 3: Calculate the selling price.
Selling price = Adjusted total cost / (1 + Markup percent)
Markup percent = 60% = 0.60
Selling price = $311.11 / (1 + 0.60) = $311.11 / 1.60 = $194.44 (rounded to the nearest cent)
Therefore, the dinners should be sold for approximately $194.44 each to achieve a 60% markup based on the selling price.
B. To calculate the markdown percent represented by a $1-off coupon, we'll need to calculate the original selling price and then determine the difference between the original selling price and the discounted selling price.
Step 1: Calculate the original selling price.
Original selling price = Selling price / (1 + Markup percent)
Markup percent = 60% = 0.60
Original selling price = $194.44 / (1 + 0.60) = $194.44 / 1.60 = $121.53 (rounded to the nearest cent)
Step 2: Determine the discounted selling price with the $1-off coupon.
Discounted selling price = Original selling price - Coupon amount
Coupon amount = $1
Discounted selling price = $121.53 - $1 = $120.53 (rounded to the nearest cent)
Step 3: Calculate the markdown percent.
Markdown amount = Original selling price - Discounted selling price
Markdown percent = (Markdown amount / Original selling price) * 100
Markdown amount = $121.53 - $120.53 = $1
Markdown percent = ($1 / $121.53) * 100 = 0.82%
Therefore, the $1-off coupon represents a markdown percent of approximately 0.8%.