Chapter 4 Section 5.3 Practice Business Math PDF

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Solve the Chapter 4 problems to practice business math and for better understanding of concepts. Very helpful class notes. Problems and solutions included....

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Section 4.3 Practice Name: __________________________ Date: _____________ 1. Does a retailer break even if an item is sold at the cost, C? 2. Given the following: Cost, C ($) Selling price, S ($) Operating expenses, E 30.00 50.00 40% of cost Determine: a) The amount of markup. b) The amount of operating (overhead) expenses. c) The operating profit or loss. d) The rate of markup on cost. e) The rate of markup on selling price. 3. Given the following: Cost, C ($) Selling price, S ($) Operating expenses, E 53.90 77.00 35% of selling price Determine: a) The amount of markup. b) The amount of operating (overhead) expenses. c) The operating profit or loss. d) The rate of markup on cost. e) The rate of markup on selling price. 4. Calculate the missing values: Cost, C ($) Markup, Selling Rate of Rate of markup M ($) price, S ($) markup on on selling price cost 152.50 47.45 ? ? ? 5. Calculate the missing values: Cost, C ($) Markup, Selling Rate of Rate of M ($) price, S ($) markup on markup on selling price cost 6.60 ? ? ? 40%

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6. The rate of markup on cost of fresh peaches in a grocery store is 125% because of the large losses from spoilage and bruising while the peaches are in storage and on display. What is the rate of markup on selling price? 7. Prestige Clothiers' regular prices for menswear are set to provide a rate of markup on selling price of 40%. Overhead expenses are 30% of cost on average. What is the operating profit on a suit that sells for $495? 8. Fine's Furniture pays the manufacturer $200 for a reclining chair. They set a retail price to cover overhead expenses of 22% of cost plus profit. If they sell the chair for $399 what is their rate of profit expressed as a percentage of cost? A) 28.4% B) 38.8% C) 99.5% D) 49.9% E) 77.5%

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Answer Key 1. No. At the break-even point, there is no profit. The selling price at the break-even point still covers OE as well as C. If an item is sold at cost, the merchant will lose OE per unit sold. 2. a) $20.00; b) $12.00; c)$8.00; d) 66.67%; e) 40.00% 3. a) $23.10; b) $26.95; c)-$3.85; d) 42.86%; e) 30.00% 4. S = $199.95; Rate of markup = 31.11%; Gross profit margin = 23.73% 5. Markup = $4.40; S = $11.00; Rate of markup = 66.67% 6. 55.56% 7. $108.90 8. E

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