Chapter 12: Markups and Markdowns: Perishables and Breakeven Analysis

Debra's Design pays $32 for designer lamps and marks them up 50% on cost. What is the dollar amount of the markup?

$16

If the breakeven point is 20,000 and the contribution margin is $1.30, how much are fixed costs?

$26,000

A couch costs $530.65 and is marked up 37% on selling price. What is the dollar markup?

$311.65

A flight from Portland, Oregon, to Spokane, Washington, decreased in price from $232 to $198. What is the markdown dollar amount?

$34

If selling price is $100 and markup based on selling price is 40%, what is the dollar markup? What is the cost?

$40; $60

Pacific Mercantile sells flannel shirts for $19.99. These are marked up 25% on selling price. What is the dollar amount of the markup?

$5.00

A couch costs $530.65 and is marked up 37% on selling price. What is the selling price?

$842.30

Upstate Chocolate purchases truffles for $0.80 and marks them up 80% on cost. Match the value with the equation used to find it. 1 $0.64 2 $1.44 3 $0.80 4 180%

1 $0.80 × .8 2 $0.80 × 1.8 = $1.44 3 100% 4 100% + 80%

Hai's Hardware sells snow shovels for $29.99. These are marked up 45% over cost. Match each value with the equation used to find it. 1 $20.68 2 145% 3 100% 4 $9.31

1 $29.99 ÷ 1.45 2 100% + 45% 3 base (cost) 4 $29.99 - 20.68

Match these key terms with their definitions. Each of these terms is an important part of calculating breakeven. 1 Fixed Cost (FC) 2 Var- iable cost (VC) 3 Sales Price (SP)

1 A cost that is constant in total, and does not change with sales. 2 A cost that goes up (or down) in direct proportion to sales. 3 Sales price per unit or total sales revenue.

Dora the Explorer DVD's were marked down from $19.99 to $12.99. Match the amounts to the terms. 1 $19.99 2 $7.00 3 35.02%

1 Original selling price (base) 2 Original selling price (base) 3 markdown percent

Match the pricing method terms to the respective definitions. 1 selling price 2 cost 3 markup 4 operating expense 5 net income

1 The price retailers charge consumers. 2 The price retailers pay to bring goods into the store. 3 The difference between the cost and the selling price. 4 The regular costs of doing business. 5 The profit remaining after subtracting the cost of bringing the goods into the store and the operating expenses from the sale of the goods.

Baby Gap sells snowpants for $34 after marking them up 18% based on selling price. Match the figure to the term. 1 $27.88 2 $6.12 3 100% 4 $34

1 coast 2 dollar markup 3 base 4 selling price

Kaylee's Kids Sports sells soccer balls for $18. They must mark up the balls 32% on selling price to make a profit. Identify each of the figures. 1 $12.24 2 $5.76 3 68% 4 100%

1 cost 2 markup dollar amount 3 complement of the markup 4 selling price

Jan's Sports sells road bicycles for $1,300. This is a 25% markup on cost. Match the values with the related terms. 1 $1040 2 100% 3 125% 4 $260

1 cost price 2 cost (base) 3 selling percent 4 markup dollar amount

Designer Cakes baked 10 dozen cupcakes expecting 15% spoilage. The cupcakes cost $4.80 per dozen to make, and they need a 75% markup on cost. Match each of the values to the respective term. 1 $48 2 $36 3 $84 4 1.5 dozen 5 $9.88

1 total cost 2 total dollar markup 3 total selling price 4 spoilage amount 5 selling price per unit (dozen)

When markup is based on selling price, then selling price is _____.

100% (base)

Percent markup based on cost is 40%. Convert to percent markup on selling price. (Round to nearest tenth of a percent.)

28.6%

Weston's Hardware sells picnic table sets for $498. After marking them up $183 based on selling price, what is the markup percent?

36.75%

Fintel produces dry erase markers that have a selling price of $2.35 and a variable cost of $.70. Fixed costs are $82,500. What is the breakeven point?

50,000

Percent markup on selling price is 40%. Convert it to percent markup on cost. (Round to nearest tenth percent.)

66.7%

A garment with a retail price of $40 is marked down 10%. What is the amount of the markdown?What is the new sales price?

Markdown: $4 New Price: $36

Which of these is the correct statement about markups based on cost?

Percent markup on cost recognizes that cost is 100% and represents the base of the portion formula.

True or false: The formula for computing the percent of a markdown is: Markdown amount / Cost.

false

A ___ represents a decrease in sales price offered to the customer. It is a reduction from the original sales price.

markdown

To calculate the dollar amount of a markup based on cost, you should multiply the ___ of markup, shown as decimal, by the ___

percent cost

When goods are lost to spoilage, the merchant calculates a new sales price based on:

profits that would have occurred without the spoilage

When variable costs are subtracted from sales, the result is called contribution margin. Contribution margin is used to pay for:

profits. fixed costs.

Pricing perishable items is reserved for (short/long) ___ shelf life goods

short

To convert markup on selling price to amount of markup, you should first:

subtract the markup % on selling price from 1.

The percent markup on selling price is:

the dollar amount of markup divided by selling price

The amount of markup is the difference between cost of the product and ___?

the selling price.

True or false: The formula for calculating selling price when markup is based on cost is as follows:Selling Price = Cost + (Cost x Markup Percent)where the dollar amount of markup is a percent of cost and cost is the base amount.

true

True or false: To calculate the dollar amount of the markup, you are solving for Portion in the formula: Portion = Base x Rate.

true

The formula S = C + M (selling price equals cost plus markup) can be modified to solve for cost. What is the formula to solve for cost?

Cost = Selling Price - Markup Cost = Selling Price x 1- % markup on selling price

When solving for cost and both markup on cost and selling price are given, you should use which of these formulas?

Cost = Selling Price / (1 + the % markup on cost)

Fintel produces dry erase markers that have a selling price of $2.35 and a variable cost of $.70. The contribution margin is:

$1.65

A coat sold for $100, which included a 40% markup on cost. What equation is used to compute cost?

$100 / (1 +.40) = $71.43