Assume that markup is based on cost. Calculate the cost and selling price. Note: Round your answers to the nearest cent.
| Cost | Selling price | Dollar markup | Percent markup on cost |
|---|---|---|---|
| | | $5.50 | 101.85% |
Answer (2)
$\boxed{ 5.40} and $\boxed{ 10.90}
Explanation
Understanding the Problem We are given the dollar markup and the percent markup on cost. We need to find the cost and selling price. Let's denote the cost as C and the selling price as S. The dollar markup is the difference between the selling price and the cost, which is given as $5.50. The percent markup on cost is the dollar markup divided by the cost, which is given as 101.85%.
Setting up Equations We can set up the following equations:
S − C = 5.50 (Dollar markup)
C 5.50 = 1.0185 (Percent markup on cost)
Calculating the Cost From the second equation, we can solve for C: C = 1.0185 5.50 C ≈ 5.400098 Rounding to the nearest cent, we get: C = $5.40
Calculating the Selling Price Now we can substitute the value of C into the first equation to solve for S: S − 5.40 = 5.50 S = 5.40 + 5.50 S = 10.90
Final Answer Therefore, the cost is $5.40 and the selling price is $10.90.
Examples
Understanding markup is essential in retail. For instance, if a store buys an item for $5.40 and marks it up by $5.50, resulting in a selling price of $10.90, they've achieved a 101.85% markup on cost. This calculation helps businesses determine profitable pricing strategies, manage inventory, and understand their financial health. Knowing how to calculate cost and selling price based on markup is crucial for making informed business decisions.
The cost of the item is $5.40 and the selling price, after accounting for a $5.50 markup, is $10.90. This is calculated using the given dollar and percent markup information. Understanding these values helps in making informed pricing decisions.
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