Marketing Essentials

Section 1: Calculating Prices

Answers to Practices

1. $4.99 ($3.50 + $1.49 = $4.99)
2. $19.95 ($29.99 - $10.04 = $19.95)

1. (A) 53.7% on cost ($11.99 - 7.80 = $4.19; $4.19 : 7.80 = .5371); (B) 34.9% on retail price ($11.99 - 7.80 = $4.19; $4.19 : $11.99 = .3494).
2. (A) 81.8% on cost ($179.99 : $220 = .8181); (B) retail price $399.99 ($179.99 + 220 = $399.99); (C) 45% on retail ($179.99 : $399.99 = .4499).
3. (A) 100% on cost ($50 : 50 = 1); (B) 50% on retail price ($50 : $100 = .5)

1. 45%
2. 18%

1. (A) $1.89 (100% - 4% = 96%; $1.81:96 = $1.89); (B) $.08 ($1.89 - $1.81 = $.08). (C)Double-check : $1.89 X .04 = .0756 or .08 markup.
2. (A) $50 (100% - 60% = 40%; $20 : .40 = $50); (B) $30 ($50 - $20 = $30). (C)Double-check: $50 X .60 = $30 markup.