Chapter 8, Problem 1ECP

To determine

The dollar markup and the selling price of an iPad.

Answer to Problem 1ECP

The dollar markup is $90 and the selling price is $690.

Explanation of Solution

Formula used:

The basic selling price formula is given by,

$\text{Selling price}\left(S\right)=\text{Cost}\left(C\right)+\text{Markup}\left(M\right)$.

The dollar markup is,

$\text{Dollar markup}=\text{Percent markup on cost}\times \text{Cost}$.

Calculation:

It is given that, the cost is $600 and the percent markup on cost is 15%.

Substitute the cost and percent markup on cost in the above formula.

$\begin{array}{c}\text{Dollar markup}=\text{Percent markup on cost}\times \text{Cost}\\ =15\%\left(\$600\right)\\ =0.15\left(\$600\right)\\ =\$90\end{array}$

Thus, the dollar markup is $90.

Substitute the cost and markup in basic selling price formula.

$\begin{array}{c}\text{Selling price}\left(S\right)=\text{Cost}\left(C\right)+\text{Markup}\left(M\right)\\ =\$600+\$90\\ =\$690\end{array}$

Thus, the dollar markup is $90 and the selling price is $690.