If a home goods retailer pays $34.50 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.) 12-AMP POWERVAC PLUS $8999 • Microfiltration • On-board tools 1-yг. Product Replacement Policy, $7.99 (a) What is the percent markup based on selling price? 61.7 % (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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If a home goods retailer pays $34.50 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.)
12-AMP
POWERVAC PLUS
$899
• Microfiltration
• On-board tools
1-yr. Product
Replacement Policy, $7.99
(a) What is the percent markup based on selling price?
61.7
(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?
Transcribed Image Text:If a home goods retailer pays $34.50 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.) 12-AMP POWERVAC PLUS $899 • Microfiltration • On-board tools 1-yr. Product Replacement Policy, $7.99 (a) What is the percent markup based on selling price? 61.7 (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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