Price Prob: The produce manager of a supermarket pays $22.60

[SCSmith]

The produce manager of a supermarket pays $22.60 for a 100-pound box of bananas. The manager estimates that 10% o f the bananas will spoil before they are sold. At what price per pound should the bananas be sold to give the supermarket an average markup rate on cost of 30%?

Selling Price = cost + markup
Mark Up = Cost + rate of mark up. So,

.30(22.60) = $6.78

$6.78 + $22.60 = $29.38

$29.38/100lbs = .29cent per pound mark up.

Do I have the right idea. Seems to easy.

 

[tkhunny]

Re: Price Problem

Mark Up = Cost + rate of mark up

This makes no sense. Typo?.

Let's go with your work...

.30(22.60) = $6.78 = Markup

$6.78 + $22.60 = $29.38 = Total Final Selling Price

$29.38/100lbs = .29cent per pound = Final Selling Price. This is NOT just the mark up.

Anyway, you forgot the spoilage. $29.38/90 lbs = 33¢/lb If you have MINIMUM profit requirements, you cannot round down.