[1] Gems Inc., an upscale jewelry store, purchased a diamond ring for $2,500 less 40% and 5%. The store’s average per unit operating expenses (overhead) is 30% of cost. The “regular selling price” of the ring is established so that if the ring is sold in a “20% off sale” the net profit at the reduced price will be 20% of cost.
(a) What is the reduced price of a ring in a “20% off’ sale?
(b) What is the “regular price” of the ring?
(c) What is the net profit if the ring is sold at the “regular price”?
[2] Samsong Inc., a TV manufacturer, lists its deluxe models for $450 each, less trade discounts of 15% and 8%. A retailer wants to make a net profit of 10% of the selling price. If expenses are 15% of the selling price, at what price must he sell the TV?
[3] The Alfacenturi Corp received an invoice dated July 12th for $5,400 with terms 3/10, 1.5/20, n/45. ABC made a payment of $2,000 on July 20th, and a second payment on July 31st that reduced the balance owing to $1,000. Find the size of the second payment.
[4] An item that normally sells for $550 is put on sale for $357.50. Find the rate of markdown.
[5] Radio Shock Electronics Co. makes televisions. Radio Shock sold a number of TV sets to a wholesaler at $399.90 per set, after discount rates of 15%, 9%, and 6%.
(a) What is the list price of a TV set?
(b) What is the size of the 3rd discount (in dollars)?
[6] A retailer has a policy of maintaining a margin of 60% on all items.
(a) What is their rate of markup?
(b) Another company maintains a 60% rate of markup on all items. What is their percent margin?
[7] A company purchases a line of basketball sneakers for $60 from Niko Inc. and sells them for $120.
(a) What is the markup in dollars?
(b) What is the percent margin?
(c) What is the rate of markup?
[8] A pair of radically shaped skis costs the retailer $600 less chain discounts of 50%, 30% and 10%. The retailer maintained a 65% margin on all items. Since spring was fast approaching the retailer drastically reduced the selling price of the skis by 60%.
(a) What was the regular selling price?
(b) What is the sale price?
(c) What is the rate of markup? (use the sale price not the regular price)
[9] What is the cost of an item that sells for $80 if the rate of markup is 60%?
[10] You know that a retailer makes $450 on the sale of a snowboard and the retailer has a rate of markup of 60%.
(a) What is the selling price of a snowboard?
(b) What is the percent margin?
[11] Filters-R-Us makes plastic coffee filters . It costs the company $6,500 to make 2,000 filters and $8,000 to make 4,000 filters. Assume the relationship between cost and the number of coffee filters produced is linear.
(a) Find an equation that determines the cost, based on the number of filters produced.
(b) How much would it cost to produce 3,000 coffee filters?
[12] Dick, Ed and Fran formed a partnership. The partnership agreement requires them to provide capital when and as required by the partnership in the ratio of 7:9:8, respectively.
(a) If the total required initial investment was $96,000, how much did each contribute?
(b) One year later, Dick’s share of another injection of capital was $10,500.
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- What is the total investment made by the partnership including the initial investment?
- What is Ed’s share of the entire investment?
[13] At the Mac’s store in Burnaby a 500 ml bottle of sparkling water sells for 1.19CAD. Convert this price to US dollars per gallon.
Rates:
- 1 CAD= 0.7125 USD
- 1.0567 Quarts= 1 Litre
- 1 Gallon = 4 Quarts
- 1,000 ml= 1 Litre
[14] A diamond ring cost a jeweler $4,200. He requires a margin of 45%.
(a) At what price should he sell the ring?
(b) What rate of markup did he realize?
[15] You are planning to open a neighbourhood ice cream shop and are doing some financial analysis. You can lease the shop for $4,300 for one month, salaries will cost $12,100 per month, hydro and miscellaneous expenses will be $450 per month. You can sell ice cream cones for $4.75 each. Each ice cream cone costs you $2.05.
(a) Write down the revenue and cost equations.
(b) Determine the number of ice cream cones you must sell in a month to break even. What are your total sales (in dollars) at the breakeven point?
(c) You’d like to make a profit of $4,000 in one month. Determine the number of ice cream cones that you would need to sell.
(d) Find the profit/loss if monthly sales (in dollars) are $14,250.
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