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29 September, 22:11

Using a markup of 35% of cost, a store priced a book at $8.91. Overhead expense is 25% of cost. Store put book on sale for 5% off regular price. What was operating profit or loss during sale?

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  1. 29 September, 22:27
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    operating profit = $0.445

    Explanation:

    given data

    markup = 35% of cost

    book price = $8.91

    Overhead expense = 25% of cost

    sale = 5% off regular price

    solution

    first we get here cost of the book (C) that is express as

    Selling price = cost of book + markup

    $8.91 = C + $0.35 C

    cost of book = $6.6

    and we know 5% discount at the marked price and 25 % overhead expenses so here operating profit will be

    operating profit = book price * (markup % - Overhead expense% - discount %)

    operating profit = $8.91 * (35% - 25% - 5%)

    operating profit = $0.445
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