Question

The selling price of a refrigerator is $712.80. The markup is 20% of the dealer's cost. What is the dealer's cost of the refrigerator?

Answer 1

Dealer's cost price of the refrigerator `C = $ 594.00`

Explanation:

For example, if a product costs $100, the selling price with a 25%

markup would be $125. Gross Profit Margin = Sales Price – Unit

Cost = $125 – $100 = $25. Markup Percentage = Gross Profit

Margin/Unit Cost = $25/$100 = 25%

Refer the above example and do the sum now.

Selling price = $ 712.80

Mark up price = 20% of dealer's cost price

Therefore, cost price = selling price - markup price

Cost price `C = 712.80 - (C * 20) / 100`

`C + (C*20)?100 = 712.80`

`C (1 + (20/100)) = 712.80`

`C = (100/120) * 712.80 = $594.00`