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2.2 Markup & Discount

2.2 Markup & Discount
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  • 7. Finding the Average Markup Percent

    You work in the lawn and garden section of a local retail store. You order 26 garden statues. The wholesale price of each statue is $35. The regular retail price is $70. During the next 4 months, you repeatedly mark down the price until you finally sell all 26 statues. Find the average markup percent for the 26 statues. Your goal as a business person is to make a profit. (See Example 3.)

    • Worked-Out Solution

      With this much calculation, it is good to use a spreadsheet.

      You paid for the garden statues. Your total markup was So your average markup percent was

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  • 8. Explain Revenue and Profit

    You work in the lawn and garden section of a local retail store. You order 26 garden statues. The wholesale price of each statue is $35. The regular retail price is $70. During the next 4 months, you repeatedly mark down the price until you finally sell all 26 statues. Is the revenue from the sale of the 26 garden statues equal to the profit? Explain your reasoning. (See Example 3.)

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     `--`       `---`     `---`     `---`      `-`'   
                                                      
    
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  • 9. Making an Overall Profit

    You work in the lawn and garden section of a local retail store. You order 26 garden statues. The wholesale price of each statue is $35. The regular retail price is $70. During the next 4 months, you repeatedly mark down the price until you finally sell all 26 statues. Your goal as a business person is to make a profit. (See Example 3.)

    1. How many garden statues did you discount below the wholesale price?
    2. How can you make a profit when you discount some of your inventory at less than the wholesale price? Explain your reasoning.
    • Worked-Out Solution

      You can use a spreadsheet to help with the calculations.

      data
      spreadsheet
      1. You only sold 3 of the statues at a price below your wholesale cost.
      2. You spent to buy the statues. You can make a profit as long as your total revenue for the 26 statues is greater than $910. It doesn't matter that you eventually sold 5 of the statues at cost and another 3 statues below cost.
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     |_|`-`     `---`   `-`  `-`   `-----`  `-`  `-`  
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  • 10. Create a Spreadsheet

    You work in the lawn and garden section of a local retail store. You order 26 garden statues. The wholesale price of each statue is $35. The regular retail price is $70. During the next 4 months, you repeatedly mark down the price until you finally sell all 26 statues. Create a spreadsheet similar to the one in Example 3 for the garden statue sales record. Experiment with the numbers in the "Quantity Sold" column. Remember that the total number of garden statues is 26. (See Example 3.)

     

     a.  Find four values such that the revenue is greater than the cost.

          (Cost = number of garden statues purchased × wholesale price)

     b.  Find four values such that the revenue is less than the cost.

     c.  Explain why you need to know this information to make a profit.

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     |_|\_||  |_____||    |_||    \____//     \__ || 
     `-` -`   `-----`     `-`'     `---`       -|_|| 
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  • 11. Finding a Discount Percent

    Find the discount percent for the generic cereal. (See Example 4.)

    • Worked-Out Solution

      The discount for the generic cereal is

      Using the brand name cereal as the base, the discount percent is

      Compared to the brand name cereal, the generic cereal has been discounted about 62%.

      People are sometimes surprised at the great difference between the cost of a brand name item and the cost of a comparable generic item. The difference illustrates the tremendous advertising cost in creating a brand name. To entice consumers to reach for a specific brand of cereal on the shelf can easily cost hundreds of millions of dollars in national advertising. This cost shows up in higher retail prices compared to products whose manufacturer spends little or no money on advertising.

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    | || | ||  / //\ \\  |  ' ||   \ ` //   | ' //  
    | \\_/ || |  ___  || | .  ||    | ||    | . \\  
     \____//  |_||  |_|| |_|\_||    |_||    |_|\_\\ 
      `---`   `-`   `-`  `-` -`     `-`'    `-` --` 
                                                    
    
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  • 12. Finding a Discount Percent

    Find the discount percent for the generic cereal. (See Example 4.)

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    |  \/  || | || | || | // __   | || | ||  |    \\  
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    |_|\/|_||  \____//   \____//   \____//   |  __//  
    `-`  `-`    `---`     `---`     `---`    |_|`-`   
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