Discount question

Question

It costs a manufacturer $3,189 to make a product. The rate of markup is 26.00% of the selling price and it offers a markdown of 13.00% during a discount period.

a. What is the regular selling price?

b. What is the reduced selling price during the discount period?

Answer 1

It’s easier here to do 3,189(.26)=829.14 (markup) and then add to the original 3,189 = 4,018.14 For the second just multiply the original price by .13 (since 26% minus 13% is 13%).

However, looking at this from a more realistic perspective, you can’t realistically tell what the sale price is just from the cost to manufacture. Because of the way the second question is worded, “26% of the SELLING PRICE,” they’re asking you to come up with a number that’s totally up to the individual sellers.

While the answer is probably just to multiply 26% times the manufacturing price (since selling price is always greater than manufacturing price since it makes good business sense), it’s just not a realistic scenario and terribly oversimplified.

Answer 2

The best way to do discount and markup problems is to use multipliers. If you have a markup and a discount, you can easily just multiply the effects.

Markup is 26%, that is a multiplier of 1.26

A discount of 13% is a multiplier of 0.87

Selling price: 3189*1.26

A markdown imposed after the markup is 3189*1.26*.87 or the last answer*.87.