Asked by Brandy Laurier on Jul 15, 2024
Verified
Furniture Warehouse bought freezers for $1,800 less 33 13\frac{1}{3}31 % and 5%. The store's overhead works out to 30% of cost. The freezers are initially priced so that a profit of 16⅔% of cost will be realized when a freezer is sold at a "15% off" price.
a) What is the initial full rate of mark-up on cost?
b) During its Scratch-and-Save sale, customers qualify for an extra discount of either 5%, 7%, or 10%. This extra discount appears when the customer scratches a ticket at the time of a purchase. It is added to the basic 15% discount, making the combined discount 20%, 22%, or 25%, respectively. What is the store's profit or loss per freezer at each of these discounts?
Scratch-and-Save
A promotional discount method where customers scratch a card to reveal a discount or prize.
Profit
The financial gain realized when the revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.
- Understand and apply various percentage calculations in retail pricing, including markdowns, markups, and discounts.
- Determine the initial full rate of mark-up on cost in retail settings.
- Analyze the effect of additional discounts on sale prices and profitability.
Verified Answer
JL
Learning Objectives
- Understand and apply various percentage calculations in retail pricing, including markdowns, markups, and discounts.
- Determine the initial full rate of mark-up on cost in retail settings.
- Analyze the effect of additional discounts on sale prices and profitability.