Please Help with Cost,Volumn, Profit and Trade Discount

[maple]

Hello everyone,

I have tried to solve the questions below, but I'm not sure if they are correct. Please help. Thank you.

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1/ The Scarlet Letter bookstore has $85 000 of sales, variables costs of $36 550, and fixed costs of $27 360. What would it sales have to be to break even?

Variable cost/total revenue 36550/85000 = 0.43
1.00X = 27360 + 0.43X
X=48000



2/ Rover's Friends provides dog washing services. For each dog, supplies cost $3 and wages are $5. To provide this service, a special room and equipment are needed, at a cost of $300 per month. Rover's Friends maintains an average of $30 dogs washed each month. What must Rover's Friends charge as a price for the dog washing service to break even?

Variable cost = 3 + 5 = 8, fixed cost = 300.
(SP*30) = 30 + (8*30)
30SP=540
SP=18


3/ The Peel Trading Company received an invoice dated September 20 for $16000 less 25% and 20%, terms 5/10, 2/30, n/60. Peel made a payment on September 30 to reduce the debt to $5000 and a payment on October 20 to reduce the debt by $3000. (a) What amount must Peel remit to pay the balance of the debt at the end of the credit period? (b) What is the total amount paid by Peel?


(a) 16000(1-0.25)(1-0.20) = 9600


(b) 9600-5000 = 4600
4600(1-0.05) = 4370 paid
9600-4600=5000 balance

5000-3000= 2000 balance
3000(1-0.02)= 2940 paid
The total amount paid by Peel was 4370 + 2940 = 7310


4/ Using a markup of 35% of cost, a store priced a book at $8.91. (a) What was the cost of the book? (b) What is
the markup as a percent of selling price?


(a) Selling price = cost + markup, cost = C
8.91 = C + 0.35C
8.91 = 1.35C
C=6.6


(b) 6.6(0.35) = 2.31
2.31/8.91 = 25.9%

 

[Ishuda]

Hello everyone,

I have tried to solve the questions below, but I'm not sure if they are correct. Please help. Thank you.

--------------------------------------------------------------------


1/ The Scarlet Letter bookstore has $85 000 of sales, variables costs of $36 550, and fixed costs of $27 360. What would it sales have to be to break even?

Variable cost/total revenue 36550/85000 = 0.43
1.00X = 27360 + 0.43X
X=48000



2/ Rover's Friends provides dog washing services. For each dog, supplies cost $3 and wages are $5. To provide this service, a special room and equipment are needed, at a cost of $300 per month. Rover's Friends maintains an average of $30 dogs washed each month. What must Rover's Friends charge as a price for the dog washing service to break even?

Variable cost = 3 + 5 = 8, fixed cost = 300.
(SP*30) = 30 + (8*30)
30SP=540
SP=18


3/ The Peel Trading Company received an invoice dated September 20 for $16000 less 25% and 20%, terms 5/10, 2/30, n/60. Peel made a payment on September 30 to reduce the debt to $5000 and a payment on October 20 to reduce the debt by $3000. (a) What amount must Peel remit to pay the balance of the debt at the end of the credit period? (b) What is the total amount paid by Peel?


(a) 16000(1-0.25)(1-0.20) = 9600


(b) 9600-5000 = 4600
4600(1-0.05) = 4370 paid
9600-4600=5000 balance

5000-3000= 2000 balance
3000(1-0.02)= 2940 paid
The total amount paid by Peel was 4370 + 2940 = 7310


4/ Using a markup of 35% of cost, a store priced a book at $8.91. (a) What was the cost of the book? (b) What is
the markup as a percent of selling price?


(a) Selling price = cost + markup, cost = C
8.91 = C + 0.35C
8.91 = 1.35C
C=6.6


(b) 6.6(0.35) = 2.31
2.31/8.91 = 25.9%

(3b) What about the remaining $2000 balance after 30 days?

 

[maple]

I'm not quite sure about the question in part (a). For part (b), I think the question was asking about the amount paid, if I'm not wrong so I was focusing on that.

(3b) What about the remaining $2000 balance after 30 days?

 

[maple]

Thank you for your valuable feedback Denis. I totally forgot about the Trade discount term rules.

So should I ignore the discount term? The questions were from my textbook and I did not left anything out.

Conditions like "term 5/10" usually mean:
5% discount if paid in full within 10 days.

Your problem is such that the amount owing is NOT paid in full.
So more info required, like is the 5% applied if not paid in full;
and if it applies, to what does it apply?