MOUNTAIN BIKE REI advertises mountain bikes for $199.90. If the store's cost is $2100 per dozen, what are (a) the markup per bicycle, (b) the percent of markup on selling price. and (c) the percent of markup on cost?

MOUNTAIN BIKE REI advertises mountain bikes for $199.90. If the store's cost is $2100 per dozen, what are (a) the markup per bicycle, (b) the percent of markup on selling price. and (c) the percent of markup on cost?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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13. MOUNTAIN BIKE REI advertises mountain bikes for $199.90. If the store's cost is $2100
per dozen, what are (a) the markup per bicycle, (b) the percent of markup on selling price,
and (c) the percent of markup on cost?

Expert Solution

Calculation of (a) Markup per bicycle:

Cost of 1 Bicycle:

$= \frac{S t o r e' s C o s t / d o z e n}{N o . o f b i c y c l e s i n a d o z e n} = \frac{$ 2, 100}{12}$

= $175

Markup of a single bicycle:

= Selling price of a bicycle - Cost of 1 Bicycle

= $(199.90 - 175)

= $24.90

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