SOLUTION: A music store buys banjos for $150.00 and sells them for $200.00. If their overhead expense on the banjos is 10% of cost, then their total handling cost is
a. $15.00
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Question 57135: A music store buys banjos for $150.00 and sells them for $200.00. If their overhead expense on the banjos is 10% of cost, then their total handling cost is
a. $15.00
b. $165.00
c. $20.00
d. $175.00
Answer by rcmcc(152) (Show Source): You can put this solution on YOUR website!
The store cost on the banjo's is $150.00
The retail price of the banjo's is $200.00 and is useless information and can be ignored.
The overhead expense is calculated on the stores cost of $150.00
So 10% of $150 is $15.00
Handling cost is the total cost of the item below profit. So the handling cost is $150+15
So tthe correct answer is (b.)
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