Selling Price Calculation for Apples
What should the selling price per pound be?
1. 500 pounds of apples were purchased at $0.34 per pound. The desired markup is 35% based on selling price, but 18% spoilage is expected.
A. $0.36
B. $0.52
C. $0.56
D. $0.64
Answer:
The selling price per pound should be $0.56 in order to achieve the desired markup of 35% based on selling price and considering the expected spoilage of 18%.
To calculate the selling price per pound, we need to consider the purchase price, desired markup, and expected spoilage.
Given:
Purchase price per pound: $0.34
Desired markup based on selling price: 35%
Expected spoilage: 18%
1. Calculate the total cost per pound:
Total cost per pound = Purchase price per pound / (1 - Spoilage rate)
Total cost per pound = $0.34 / (1 - 0.18) = $0.34 / 0.82 ≈ $0.4146
2. Calculate the selling price per pound:
Selling price per pound = Total cost per pound * (1 + Markup rate)
Selling price per pound = $0.4146 * (1 + 0.35) ≈ $0.5600
Rounding the selling price per pound to the nearest cent, the answer is:
C. $0.56