Chapter 8, Problem 12MCQ

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Chapter
Section

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
1 views

Jennings Hardware Store marks up its merchandise by 30%. If a part costs $25.00, which of the following is true? a. The price is$7.50. b. The markup is $32.50. c. The price is$32.50. d. The markup is pure profit. e. All of these.

To determine

Identify the correct statement.

Explanation

Markup Percentage:

The percentage that is applied to the cost of any product or service is known as the markup percentage. The price using markup can be calculated by adding the desired profit to the cost of any product or service.

c.

Use the following formula to calculate the price of merchandise:

Price of merchandise=Cost price+(Cost price×Markup percentage)

Substitute \$25 for the cost price and 30% for markup percentage in the above formula

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