SOLUTION: Homeward Hardware buys cat litter for $6 less 20% per bag. The store's overhead is 45% of cost and the owner requires profit of 20% of cost. For how much should the bags be sold

Question 1107386: Homeward Hardware buys cat litter for $6 less 20% per bag. The store's overhead is 45% of cost and the owner requires profit of 20% of cost.
For how much should the bags be sold?
What is the amount of markup included in the selling price?
What is the rate of markup based on selling price?
What is the rate of markup based on cost?
What is the break-even price?
What operating profit or loss is made if a bag is sold for $6?
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
They buy it for 6*(0.80) or $4.80 per bag
The overhead is 45% of that of 2.16.
that makes the price 6.96, and 20% profit on cost is $0.96
The selling price per bag should be $7.92
The markup based on selling price is $3.12 /$7.92, or 39.4%
Based on cost, it is 65%
Break-even price is $6.96.
At $6, the loss is $0.96 per bag.

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