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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Enchanted Gardens, a chain of flower shops, purchases 800 dozen roses for Valentine’s Day at a cost of $6.50 per dozen. If a 10 % spoilage rate is anticipated, at what price per dozen should the roses be sold to achieve a 60 % markup based on selling price? Round to the nearest cent.

To determine

To calculate: The selling price per pound of roses to achieve 60% markup based on selling price if the quantity of roses is 800 dozen, the spoilage rate is 10%, price per dozen is $6.5.

Explanation

Given Information:

The quantity of roses is 800 dozen, the price of roses per dozen is $6.5, the spoilage rate is 10% and percent markup based on selling price is 60%.

Formula used:

The cost can be computed as:

Cost=Total quantity×price per dozen

The selling price can be calculated using the following equation:

Total expected selling price=Cost100%%MSP

The Anticipated spoilage is calculated using the following equation:

Anticipated Spoilage=Total Quantity×Spoilage Rate

The selling price of perishable goods can be calculated using the following equation:

Selling Price of perishables=Total expected selling priceTotal quantityAnticipated spoilage

Calculation:

Consider the provided data,

The quantity of roses is 800 dozen, the price of roses per dozen is $6.5, the spoilage rate is 10% and percent markup based on selling price is 60%.

The problem can be solved in 3 steps as follows:

Step 1.

The cost of roses is:

Cost=Total quantity×price per dozen

Substitute the values of total quantity and price of roses per dozen in the above formula,

Cost=Total quantity×price per dozen=800×6.5=5,200

Thus, the cost of 800 dozen roses is $5,200.

The formula for total expected selling price is,

Total expected selling price=Cost100%%MSP

Substitute cost=$5,200 and %MSP=60% in the above formula,

Total expected selling price=Cost100%%MSP=5,200100%60%=5,20040%=5,2000

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