Question 1

If the selling price and percent markup on selling price are given, the actual cost can be calculated.

Accepted Answer

A) True 
 B)False

Question 2

Markup is:

Accepted Answer

A) Selling price + cost 
B) Selling price divided by cost 
C) Selling price - cost 
D) Selling price × (1 + cost) 
E) None of these 
A) Selling price + cost 
B) Selling price divided by cost 
C) Selling price - cost 
D) Selling price × (1 + cost) 
E) None of these

Question 3

Operating expenses are the unusual expense of doing business.

Accepted Answer

A) True 
 B)False

Question 4

An Apple iPad sells for $699.00 on eBay. The markup is 30% on cost. What is the total cost of the iPad sold on eBay?

Accepted Answer

A) $537.69 
B) $489.30 
C) $908.70 
D) 490.00 
E) None of these 
A) $537.69 
B) $489.30 
C) $908.70 
D) 490.00 
E) None of these

Question 5

When markup is based on selling price, the cost is the base.

Accepted Answer

A) True 
 B)False

Question 6

Selling price times 1 minus markup percent on selling price will equal the cost if markup is based on selling price.

Accepted Answer

A) True 
 B)False

Question 7

Ski Market sells snowboards. Ski Market knows that the most people will pay for the snowboards is $129.99. Ski Market is convinced that it needs a 45% markup based on cost. The most that Ski Market can pay to its supplier for the snowboards is:

Accepted Answer

A) $98.65 
B) $96.65 
C) $88.65 
D) $87.65 
E) None of these 
A) $98.65 
B) $96.65 
C) $88.65 
D) $87.65 
E) None of these

Question 8

The markdown percent is the amount of markdown divided by the new sale price.

Accepted Answer

A) True 
 B)False

Question 9

Gross profit plus operating expenses equals net income.

Accepted Answer

A) True 
 B)False

Question 10

Breakeven point is fixed cost divided by contribution margin.

Accepted Answer

A) True 
 B)False

Question 11

Markup represents an amount needed to cover operating expenses.

Accepted Answer

A) True 
 B)False

Question 12

(1 + markup percent on cost) × cost equals:

Accepted Answer

A) Cost at wholesale 
B) Cost at retail 
C) Selling price 
D) Markup 
E) None of these 
A) Cost at wholesale 
B) Cost at retail 
C) Selling price 
D) Markup 
E) None of these

Question 13

Jackie Smith, a customer of Roger Blank, will pay only $190 for a tennis racket. Assuming Roger works on a 60% markup on the selling price, the most Roger will pay the manufacturer is:

Accepted Answer

A) $76 
B) $114 
C) $67 
D) $141 
E) None of these 
A) $76 
B) $114 
C) $67 
D) $141 
E) None of these

Question 14

Zales bought a tea set for $1,400. Zales wants to markup the set 55% of the selling price. The selling price of the tea set should be:

Accepted Answer

A) $2,030 
B) $2,300 
C) $3,111.11 
D) $3,111.10 
E) None of these 
A) $2,030 
B) $2,300 
C) $3,111.11 
D) $3,111.10 
E) None of these

Question 15

Macy's Department Stores markup men's cologne 63% on cost for an 8-ounce bottle. A bottle of cologne costs Macy's $23.00. What is the selling price for the 8-ounce bottle?

Accepted Answer

A) $31.51 
B) $37.49 
C) $37.47 
D) $37.00 
E) None of these 
A) $31.51 
B) $37.49 
C) $37.47 
D) $37.00 
E) None of these

Question 16

Contribution margin is:

Accepted Answer

A) Net sales 
B) Revenues plus variable cost 
C) Revenues minus variable cost 
D) Revenues divided by fixed cost 
E) None of these 
A) Net sales 
B) Revenues plus variable cost 
C) Revenues minus variable cost 
D) Revenues divided by fixed cost 
E) None of these

Question 17

When markups are based on the selling price, the:

Accepted Answer

A) Selling price is the portion 
B) Selling price is 100% 
C) Selling price is cost - markup 
D) Selling price is 100% + cost percent 
E) None of these 
A) Selling price is the portion 
B) Selling price is 100% 
C) Selling price is cost - markup 
D) Selling price is 100% + cost percent 
E) None of these

Question 18

The selling price can be calculated if the cost and the percent markup on cost are given.

Accepted Answer

A) True 
 B)False

Question 19

Dollar markup divided by the selling price equals percent markup on cost.

Accepted Answer

A) True 
 B)False

Question 20

Gross profit is net sales minus the cost of bringing merchandise into the store.

Accepted Answer

A) True 
 B)False

Exam 8: Markups and Markdowns: Perishables and Breakeven Analysis

If the selling price and percent markup on selling price are given, the actual cost can be calculated.

Markup is:

Operating expenses are the unusual expense of doing business.

An Apple iPad sells for $699.00 on eBay. The markup is 30% on cost. What is the total cost of the iPad sold on eBay?

When markup is based on selling price, the cost is the base.

Selling price times 1 minus markup percent on selling price will equal the cost if markup is based on selling price.

Ski Market sells snowboards. Ski Market knows that the most people will pay for the snowboards is $129.99. Ski Market is convinced that it needs a 45% markup based on cost. The most that Ski Market can pay to its supplier for the snowboards is:

The markdown percent is the amount of markdown divided by the new sale price.

Gross profit plus operating expenses equals net income.

Breakeven point is fixed cost divided by contribution margin.

Markup represents an amount needed to cover operating expenses.

(1 + markup percent on cost) × cost equals:

Jackie Smith, a customer of Roger Blank, will pay only $190 for a tennis racket. Assuming Roger works on a 60% markup on the selling price, the most Roger will pay the manufacturer is:

Zales bought a tea set for $1,400. Zales wants to markup the set 55% of the selling price. The selling price of the tea set should be:

Macy's Department Stores markup men's cologne 63% on cost for an 8-ounce bottle. A bottle of cologne costs Macy's $23.00. What is the selling price for the 8-ounce bottle?

Contribution margin is:

When markups are based on the selling price, the:

The selling price can be calculated if the cost and the percent markup on cost are given.

Dollar markup divided by the selling price equals percent markup on cost.

Gross profit is net sales minus the cost of bringing merchandise into the store.

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