Asked by Jalen Taper on May 01, 2024
Verified
Under what unusual circumstances will the rate of mark-up on cost equal the rate of mark-up on selling price?
Mark-up
Additional pricing on goods’ cost aimed to cover running expenses and secure profit.
Cost
The amount of money required to purchase something or the expense incurred to produce something.
Selling Price
The amount for which a good or service is sold to the customer.
- Acquire insight into the concept of mark-up on cost and selling price.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
In order to have MC×100%=MS×100%\frac{M}{C} \times 100 \%=\frac{M}{S} \times 100 \%CM×100%=SM×100% , we must have C = S. That is, the item must be sold at cost, making the mark-up M = 0. This would happen if a merchant wishes to price some items in old inventory "at cost" to clear them out.
Learning Objectives
- Acquire insight into the concept of mark-up on cost and selling price.