Business math 141

Question

a jewelry store expects its overhead to be 25% of sales and its net profit to be 50% of sales. The cost to the store is $40 less 20% for a watch? a)what is the cost of the watch? b)what is the markup? c)what is the spf? d) what is the selling price of the watch?

Answer 1

profit = ,5(revenue)= revenue-costs=p= r/2= r-c

costs = half revenue= half sales=c =r/2

r=2c markup = 100%

overhead = fixed costs = 1/5 revenue= r/5

watch cost =$40-.2(watch cost)

wc= 40-wc/5

wc =40/1.2 = $33.33

watch price = 2wc= $66.67

selling price = twice the cost, 100% markup