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Chapter 8 Problems and Solutions

8-16 - Calculate Dollar Markup and Percent Markup on Cost 8-18 - Calculate Cost When You Know the Selling Price and Percent Markup on Cost 8-21 - Calculate Dollar Markup and Percent Markup on Cost 8-22 - Calculate Cost When You Know the Selling Price and Percent Markup on Cost

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Chapter 8 Problems and Solutions

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  1. 8-16 - Calculate Dollar Markup and Percent Markup on Cost 8-18 - Calculate Cost When You Know the Selling Price and Percent Markup on Cost 8-21 - Calculate Dollar Markup and Percent Markup on Cost 8-22 - Calculate Cost When You Know the Selling Price and Percent Markup on Cost Click here to see all problems and solutions Chapter 8 Problems and Solutions

  2. Problem 8-16 Sam Slater bought an old Walter Lantz Woody Woodpecker oil painting for $12,000. He plans to resell it on eBay for $15,000. What are the dollar markup and percent markup on cost? Check the cost figure. Step 1: Calculate the dollar markup. $15,000 – 12,000 = $3,000 Step 2: Calculate the percent markup on cost. $3,000 = .25 = 25% $12,000 Check: C = Dollar markup = $3,000 = $12,000 Percent markup on cost .25

  3. Problem 8-18 Cecil Green sells golf hats. He knows that most people will not pay more than $20 for a golf hat. Cecil needs a 40% markup on cost. What should Cecil pay for his golf hats? Round to the nearest cent. Step 1: Calculate the selling price with a markup based on cost. $20 = C + .40C Step 2: Combine like terms and isolate the variable. $20 = 1.40C $20 = 1.40C 1.40 1.40 $14.29 = C Check: Cost = Selling price 1 + Percent markup on cost $14.29 = $20 1.40

  4. Problem 8-21 “Approximately 57% of Americans drink coffee every day, between three and four cups on average. In fact, coffee is the second most valuable commodity in the world, after petroleum, and the largest food import in the United States,” says Erin Joyce from Financial Edge Investopedia. Seattle, Washington, was the birthplace of the coffee shop era providing a cup of “joe” along with a relaxing atmosphere ripe for the gathering of friends. This atmosphere is not without cost. The latest calculations for brewing a cup of drip coffee showed cost per cup to be $.42. Purchasing a cup of drip coffee from a coffee shop costs $1.50. What is the percent markup based on cost to the nearest hundredth percent for purchasing a cup of brewed coffee? Step 1: Calculate the markup amount. $1.50 - .42 = $1.08 Step 2: Divide the markup by the cost to calculate percent markup based on cost. $1.08/.42 = 2.5714 = 257.14%

  5. Problem 8-22 Misu Sheet, owner of the Bedspread Shop, knows his customers will pay no more than $120 for a comforter. Misu wants a 30% markup on selling price. What is the most that Misu can pay for a comforter? Step 1: Calculate the cost based on selling price. $120 = C + .30($120) $120 = C + $36 -$36 -$36 $84 = C C = Selling price x (1 – Percent markup on selling price) $84 = $120 x .70

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