If a home goods retailer pays $32.50 for the vacuum cleaner shown here, answer the following questions. (Round dollars to the nearest cent and percents to the nearest tenth of a percent.) An advertisement has a picture of a vacuum cleaner. From top to bottom, the text of the ad is as follows. 12 amp Powervac Plus $89.99 Microfiltration On-board tools 1 year Product Replacement Policy, $7.99 (a) What is the percent markup based on selling price? % (b) If the retailer pays $1.70 to the insurance company for each product replacement policy sold, what is the percent markup based on selling price of the vacuum cleaner and policy combination? % (c) If 6,000 vacuum cleaners are sold in a season and 40% are sold with the insurance policy, how many additional "markup dollars," the gross margin, were made by offering the policy? $
If a home goods retailer pays $32.50 for the vacuum cleaner shown here, answer the following questions. (Round dollars to the nearest cent and percents to the nearest tenth of a percent.) An advertisement has a picture of a vacuum cleaner. From top to bottom, the text of the ad is as follows. 12 amp Powervac Plus $89.99 Microfiltration On-board tools 1 year Product Replacement Policy, $7.99 (a) What is the percent markup based on selling price? % (b) If the retailer pays $1.70 to the insurance company for each product replacement policy sold, what is the percent markup based on selling price of the vacuum cleaner and policy combination? % (c) If 6,000 vacuum cleaners are sold in a season and 40% are sold with the insurance policy, how many additional "markup dollars," the gross margin, were made by offering the policy? $
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 14E: Many different businesses employ markup on cost to arrive at a price. For each of the following...
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If a home goods retailer pays $32.50 for the vacuum cleaner shown here, answer the following questions. (Round dollars to the nearest cent and percents to the nearest tenth of a percent.)
An advertisement has a picture of a vacuum cleaner. From top to bottom, the text of the ad is as follows.
- 12 amp Powervac Plus
- $89.99
- Microfiltration
- On-board tools
- 1 year Product Replacement Policy, $7.99
(a)
What is the percent markup based on selling price?
%
(b)
If the retailer pays $1.70 to the insurance company for each product replacement policy sold, what is the percent markup based on selling price of the vacuum cleaner and policy combination?
%
(c)
If 6,000 vacuum cleaners are sold in a season and 40% are sold with the insurance policy, how many additional "markup dollars," the gross margin, were made by offering the policy?
$
(d)
As a housewares buyer for the retailer, what is your opinion of such insurance policies, considering their effect on the "profit picture" of the department? How can you sell more policies?
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