Frank sells produce. He must mark the selling price of bananas high enough to make the desired profit. He paid $0.45 per pound for 400 pounds of bananas. On average, 10% of the bananas will spoil. Find the selling price per pound needed to achieve 145% markup on cost.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Frank sells produce. He must mark the selling price of bananas high enough to make the desired profit. He paid $0.45 per pound for 400 pounds of bananas. On average, 10% of the bananas will spoil. Find the selling price per pound needed to achieve 145% markup on cost.

Expert Solution
Step 1

Given,

 

Cost = $0.45 per pound

Quantity = 400 - 10% = 360 pounds

Total Cost of Purchases = 400 x $0.45 = $180

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