o make a profit, the merchandise buyer must set the retail price at an amount that covers the wholesale price of the item and provides the retailer with a profit. Recall that the three elements involved in the pricing of all goods are the cost of the merchandise (i.e., wholesale/cost price), the retail price, and the difference between them, which is the markup. For this assignment, you will solve retail-pricing problems by calculating retail, cost, and markup figures. Round each answer to two decimal places, when necessary.
Dollar Markup = Markup % x Present Retail or Cost Price
Retail = Cost + Dollar Markup
Dollar Markup = Retail – Cost
Cost = Retail – Dollar Markup
Note: For each problem, find the dollar markup first before you solve the problem.
Find the cost of a dress that retails for $185 and has a 55% markup.
Dollar Markup = .55 x $185 = $101.75
Cost = $185 – $101.75 = $83.25
Solve the following problems:
1. What is the retail price of a $12.87 item with a markup of 28%?
2. What is the retail price of a $15.05 item with a markup of 38%?
3. If a shoe buyer wants to buy some peep-toe pumps to retail for $49.50 each and needs to obtain a markup of 53.4%, what is the most that these pumps can cost?
4. A toy buyer planned a sale on dolls to retail each for $25. If the overall markup on the purchase was 46%, what was the cost per doll?
5. A manufacturer offered belts at $64 a dozen. If a buyer were to take a 35.5% markup, at what retail price would each belt sell?
6. What retail price would provide a 64% markup for a 60-inch flat screen television with a cost price of $975?
7. A buyer took advantage of a vendor sale of 2 dozen genuine leather handbags for $450. What must each handbag retail for to achieve a 60% markup?