Calculate answers for the following scenarios if retailer markups are based on their selling price:
a)A retailer sells a set of measuring cups for $2.50 after adding $.50 to the original cost. What is the markup percentage? b)The cost of a food blender for the retailer is $40 and the retailer applies a markup of $60. What is the retail markup percentage? c)A retailer marks up all products by 20 percent. If a set of glasses costs the retailer $10, what will the final selling price be? d)A retailer marks up all products by 75 percent. If the selling price of a set of plastic bowls is $4, what was the cost to the retailer?
What will be an ideal response?
The dollar markup is calculated as selling price minus cost, and percentage markup can be calculated by dividing dollar markup by selling price.
| a) | Dollar markup  selling price = percent markup |
$0.50  $2.50 = 20% | |
| b) | Selling price = (dollar markup + cost) |
Dollar markup  selling price = percent markup | |
$60  ($60 + $40) = 60% | |
| c) | Dollar markup = (selling price - cost) |
(Selling price - cost)  selling price = percent markup | |
(S - $10)  S = .20 | |
| (S - $10) = .20S | |
| $10 = .80S | |
| Selling price = $12.50 | |
| d) | (Selling price - cost)  selling price = percent markup |
($4 - C)  $4 = .75 | |
($4 - C) = (.75  $4) | |
| C = $4 - $3 = $1 | |
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