The Formula For Markup Based On Selling Price Case Study
QUESTION 4
Explain how the formula for markup based on cost could be used to calculate cost, selling price, dollar markup, and percent markup. Pick a company and explain why it would mark up the goods based on cost rather than on selling price. Explain how the formula for markup based on selling price could be used to calculate cost, selling price, dollar markup, and percent markup. Pick a company and explain why it would mark up the goods based on selling price rather than on cost. Give an example of markup based on selling price.
A company that uses the formula markup based on cost identifies that the cost is 100%. This 100% represents the base of the portion formula. An example of Goodyear Tire & Rubber Co. will be given.
Assuming that …show more content…
A company that uses the formula markup based on selling price identifies that the selling price is 100%. An example of Goodyear Tire & Rubber Co. will be given. Assuming that Goodyear Tire & Rubber Co. decide to use percent markup based on selling price. Given that cost of each tire = $400, selling price of each tire = $600.
Calculating dollar markup and percent markup based on selling price:
Compute the dollar markup with selling price formula M = S – C
Dollar markup = Selling price – Cost
S= selling price, C=cost, M= markup percent Dollar markup = Selling price – Cost
Dollar markup = $600 - $400 = $200
Compute the percent markup with the formula (Rate = …show more content…
This is because when stores offer best prices, obviously the prices will be cheap. So, products will small prices will not give big profits to company. In a nutshell, offering best price all the time would not give expected amount of profits. This is also not suitable for long term sales.
QUESTION 7
Explain the steps in calculating a selling price for perishable items. Recall a situation where you saw a store did not follow the five steps. How did it sell its items?
Give an example of pricing perishable items.
Perishable means something that likely to die, spoil, or decay. Perishable is also known as spoilage. Perishable item is an item that has limited shelf life such as meat, vegetables, dairy products, and even prescription drugs. The products are ensuring to be reach to the consumers in a fresh condition.
The formula to calculate the pricing perishable item is stated below.
Pricing perishable = Total dollar sales Number of unit produced - spoilage These are the step for calculating the pricing perishable item: Identify the total dollar sales by calculating the all cost of good. Calculate the total number of production of good. Indentify the number of goods that was
Explain how the formula for markup based on cost could be used to calculate cost, selling price, dollar markup, and percent markup. Pick a company and explain why it would mark up the goods based on cost rather than on selling price. Explain how the formula for markup based on selling price could be used to calculate cost, selling price, dollar markup, and percent markup. Pick a company and explain why it would mark up the goods based on selling price rather than on cost. Give an example of markup based on selling price.
A company that uses the formula markup based on cost identifies that the cost is 100%. This 100% represents the base of the portion formula. An example of Goodyear Tire & Rubber Co. will be given.
Assuming that …show more content…
A company that uses the formula markup based on selling price identifies that the selling price is 100%. An example of Goodyear Tire & Rubber Co. will be given. Assuming that Goodyear Tire & Rubber Co. decide to use percent markup based on selling price. Given that cost of each tire = $400, selling price of each tire = $600.
Calculating dollar markup and percent markup based on selling price:
Compute the dollar markup with selling price formula M = S – C
Dollar markup = Selling price – Cost
S= selling price, C=cost, M= markup percent Dollar markup = Selling price – Cost
Dollar markup = $600 - $400 = $200
Compute the percent markup with the formula (Rate = …show more content…
This is because when stores offer best prices, obviously the prices will be cheap. So, products will small prices will not give big profits to company. In a nutshell, offering best price all the time would not give expected amount of profits. This is also not suitable for long term sales.
QUESTION 7
Explain the steps in calculating a selling price for perishable items. Recall a situation where you saw a store did not follow the five steps. How did it sell its items?
Give an example of pricing perishable items.
Perishable means something that likely to die, spoil, or decay. Perishable is also known as spoilage. Perishable item is an item that has limited shelf life such as meat, vegetables, dairy products, and even prescription drugs. The products are ensuring to be reach to the consumers in a fresh condition.
The formula to calculate the pricing perishable item is stated below.
Pricing perishable = Total dollar sales Number of unit produced - spoilage These are the step for calculating the pricing perishable item: Identify the total dollar sales by calculating the all cost of good. Calculate the total number of production of good. Indentify the number of goods that was