+598 Central Ski and Cycle purchased 50 pairs of ski boots for $350 per pair less 30% and 10%. The regular rate of markup on selling price of the boots is 50%. The store’s overhead is 25% of the selling price. During a January clearance sale, the price was reduced to $325 per pair. What is the rate of markdown and what was the profit or loss on each pair of boots at the sale price? Answer to the nearest cent.
Any help with calculations would be greatly appreciated , thanks
Central Ski and Cycle purchased 50 pairs of ski boots for $350 per pair less 30% and 10%. The regular rate of markup on selling price of the boots is 50%. The store’s overhead is 25% of the selling price. During a January clearance sale, the price was reduced to $325 per pair. What is the rate of markdown and what was the profit or loss on each pair of boots at the sale price? Answer to the nearest cent.
Any help with calculations would be greatly appreciated , thanks
This is a bit tricky in that it deals with "markups" and " markdowns". Let us see what we can do:
Since they got discounts of 30% and 10% on each pair of $350 boots, the net cost to them would be:
$350.00 - 30% - 10%=$220.50 net cost per pair of boots to the company. But, the company, presumably, intends to sell them at the advertised price of $350 per pair.
So, if they have a sale in January at $325 per pair, the rate of markdown from $350 to $325 would be 7.14%.
Since the markup is 50% of the sale price, then each pair is sold in January for $325 X 1.50=$487.50.
But, the company has "an overhead cost of 25% of the selling price", which means, I think!, that 25% has to come off the selling price of $487.50. If that's right, then $487.50 - 25%=$365.63 net sale price per 1 pair of ski boots.
Since it cost the company $220.50 net per 1 pair of boots, and it sold it for $365.63, then the net profit per 1 pair of ski boots would be:$365.63 - 220.50=$145.13
I think it is right, but I'm no expert in "retail sales"!. See if this makes sense to you!. Good luck.
NeedSupply: I forgot to mention to you that I was suspicious of their quoting two discounts rates of "30% and 10%". They could very well mean that the discount isn't 30 + 10=40%, which is what I assumed, but 30%+10% of 30%, which would be a discount of 33% instead of 40%. If you have seen before, which I haven't, then it should be clear to you what they mean. If it is 33%, then that means you have to r-do all the calculations. But that shouldn't be a big deal, since it will take you 10-15 minutes to re-calculate all the numbers. You should have it clarified one way or another. Good luck to you.
