+598 The item in question at a unit selling price of $100. Red River’s forecast volume of sales for the first year is 8000 units. The annual fixed cost for adding this product to the inventory is estimated to be $200,000. The net price, after the standard supplier discount of 25%, plus an additional 10% for early order placement, is $60 per unit, delivered. Since the product is market–ready, this is also the unit variable cost.
What percentage is the markup on cost?
Any help with steps would be great thanks very much
COST per unit 200,000/8000 = 25 ea
Delivered to sellers (after all of the discounts mentioned) at 60 ea
60/25 x 100 = 240% profit for manufacturer.... is what I would say
The retailers buy them for 60 cost and sell them for 100 retail
100/60 x 100 = 167% for the retailers
OVERALL 100/25 x 100 = 400%
COST per unit 200,000/8000 = 25 ea
Delivered to sellers (after all of the discounts mentioned) at 60 ea
60/25 x 100 = 240% MARKUP for manufacturer.... is what I would say
The retailers buy them for 60 cost and sell them for 100 retail
100/60= 167% MARKUP for the retailers
OVERALL 100/25 = 400% MARKUP
(added 'MARKUP' instead of PROFIT ...sorry)
