SOLUTION: Billington’s buys shirts for $21 less 25% and 20%. The shirts are priced at a regular selling price to cover expenses of 20% of regular selling price and a profit of 17% of regul
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Question 1169173: Billington’s buys shirts for $21 less 25% and 20%. The shirts are priced at a regular selling price to cover expenses of 20% of regular selling price and a profit of 17% of regular selling price. For a special weekend sale, shirts were marked down 20%.
(a) What was the operating profit or loss on the shirts sold during the weekend sale?
(b)What rate of markup was realized based on cost?
P.s. I'm sorry I know this isn't algebra but i badly want to learn how to solve this. Please please please Found 2 solutions by CPhill, ikleyn:Answer by CPhill(1959) (Show Source):
You can put this solution on YOUR website! Let's break down this problem step by step.
**(a) Operating Profit/Loss During the Weekend Sale**
1. **Calculate the Cost Price:**
* List price: $21
* First discount (25%): $21 * 0.25 = $5.25
* Price after first discount: $21 - $5.25 = $15.75
* Second discount (20%): $15.75 * 0.20 = $3.15
* Final cost price: $15.75 - $3.15 = $12.60
2. **Calculate the Regular Selling Price:**
* Expenses: 20% of regular selling price
* Profit: 17% of regular selling price
* Total expenses + profit: 20% + 17% = 37% of regular selling price
* Cost price represents: 100% - 37% = 63% of regular selling price
* Regular selling price: $12.60 / 0.63 = $20
3. **Calculate the Weekend Sale Price:**
* Markdown: 20% of regular selling price
* Markdown amount: $20 * 0.20 = $4
* Weekend sale price: $20 - $4 = $16
4. **Calculate the Operating Profit/Loss:**
* Profit/Loss = Weekend sale price - Cost price
* Profit/Loss = $16 - $12.60 = $3.40
Therefore, the operating profit on the shirts sold during the weekend sale was $3.40.
**(b) Rate of Markup Realized Based on Cost**
1. **Calculate the Markup Amount:**
* Markup = Weekend sale price - Cost price
* Markup = $16 - $12.60 = $3.40
2. **Calculate the Rate of Markup Based on Cost:**
* Rate of markup = (Markup / Cost price) * 100%
* Rate of markup = ($3.40 / $12.60) * 100%
* Rate of markup ≈ 26.98%
Therefore, the rate of markup realized based on cost was approximately 26.98%.
**Final Answers:**
(a) What was the operating profit or loss on the shirts sold during the weekend sale? **$3.40 profit**
(b) What rate of markup was realized based on cost? **26.98%**
