Deck 8: Markups and Markdowns: Perishables and Breakeven Analysis

Question 1

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

Answer 1

True

Question 2

Gross profit plus operating expenses equals net income.

Answer 2

False

Question 3

Dollar markdowns represent price increases to the original selling price.

Answer 3

False

Question 4

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

Question 5

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

Question 6

Operating expenses are the unusual expense of doing business.

Question 7

When markup is based on selling price, the cost is 100%.

Question 8

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

Question 9

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

Question 10

Actual cost is equal to the cost times the markup percent on cost plus 1.

Question 11

Cost is equal to the selling price divided by (1 + markup percent on cost) when markup is based on cost.

Question 12

Percent markup on the selling price is equal to the amount of markup divided by the selling price.

Question 13

Selling price = cost - markup.

Question 14

When markups are based on cost, the selling price is 100%.

Question 15

Percent markup on selling price can be converted to percent markup on cost by formula.

Question 16

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

Question 17

The amount of markup is represented as the portion only when markups are based on cost.

Question 18

A final selling price may be the result of a series of markdowns (and possibly some markups).

Question 19

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

Question 20

Markup represents an amount needed to cover operating expenses.

Question 21

Red Jeans Inc. sells jeans that cost $16.55 for a selling price of $35.99. The percent of markup based on cost is:

A) 17.46%
B) 94.44%
C) 4.02%
D) 7.07%
E) None of these

Question 22

Gap sells jeans that cost $21.00 for a selling price of $29.95. The percent of markup based on cost is:

A) 42.62%
B) 46.26%
C) 49.88%
D) 48.9%
E) None of these

Question 23

Setting a price on perishable items does not include:

A) Calculating total cost
B) Calculating total selling price
C) Calculating a selling price per day
D) Calculating a selling price per pound
E) None of these

Question 24

Markdowns may be caused by:

A) Lack of seasonal changes
B) Lack of special promotions
C) Style changes
D) Decreased competition
E) None of these

Question 25

Breakeven point is fixed cost divided by contribution margin.

Question 26

The markdown percent is calculated by:

A) Amount of markdown divided by sale price
B) Amount of markdown divided by original selling price
C) Sale price divided by amount of markdown
D) Original selling price divided by amount of markdown
E) None of these

Question 27

If percent markup on cost and selling price are known, one is able to compute the:

A) Amount of markdown
B) Amount of spoilage
C) Cost
D) Selling price at wholesale
E) None of these

Question 28

Contribution margin is selling price plus unit cost.

Question 29

Bill's Furrier marks up mink coats $3,000. This represents a 50% markup on cost. What is the cost of the coats?

A) $1,500
B) $6,000
C) $4,500
D) $9,000
E) None of these

Question 30

To place a price on perishable items, there is no need to calculate the total cost as well as total selling price of the items.

Question 31

Markup is:

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

Question 32

Net income is calculated as:

A) Net sales + costs - operating expenses
B) Net sales - costs - operating expenses
C) Net sales + costs + operating expenses
D) Net sales - costs + operating expenses
E) None of these

Question 33

When markup is based on cost:

A) Cost is the portion
B) Markup is the rate
C) Cost is equal to selling price
D) Cost is 100%
E) None of these

Question 34

A local True Value Hardware Store marks its goods up 38% on cost. If a snow blower cost True Value $400, the selling price would be:

A) $525.00
B) $552.00
C) $542.00
D) $452.00
E) None of these

Question 35

J.C. Penney sells a Timex watch for $139.99 that cost $89.97. J.C. Penney's percent of markup based on the selling price is:

A) 35.56%
B) 35.57%
C) 35.73%
D) 37.52%
E) None of these

Question 36

Jay King, owner of a local Bed and Bath store, knows that his customers will pay at most $299 for a blow-up bed. Assuming Jay wants a 40% markup on the selling price, the most he could pay the manufacturer for the blow-up bed is:

A) $197.04
B) $179.04
C) $104.65
D) $179.40
E) None of these

Question 37

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

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

Question 38

When markups are based on the selling price, the:

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 39

An Apple iPod sells for $299, which is marked up 40% of the selling price. The cost of the iPod is:

A) $197.40
B) $179.40
C) $149.70
D) $194.70
E) None of these

Question 40

A computer sells for $995, which is marked up 35% of the selling price. The cost of the computer is:

A) $1,343.25
B) $1,433.52
C) $1,350.77
D) $1,530.77
E) None of these

Question 41

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:

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

Question 42

A local Dot Dress Shop is selling a suit for $99. Because of changing styles, the first markdown was 8% and second markdown was 25%. The suit still did not sell, so a final markdown of 10% was taken. The sale price is currently:

A) $68.31
B) $86.31
C) $61.84
D) $61.48
E) None of these

Question 43

A video game sells at Arnolds for $14.99. Arnolds marks the game up at 40% of the selling price. The cost of the video game to Arnold is:

A) $6.00
B) $8.99
C) $6.50
D) $9.10
E) None of these

Question 44

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?

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

Question 45

Fathers' Day suits were advertised for 35% off the regular price. A suit regularly sells for $210. The amount of the markdown is:

A) $37.50
B) $136.50
C) $73.50
D) $163.50
E) None of these

Question 46

Kohl's sells watches that cost $6.95 for a selling price of $39.99. What is the percent markup on cost? (Round to the nearest tenth percent.)

A) 17.4%
B) 82.6%
C) 575.9%
D) 475.4%
E) None of these

Question 47

Straub's Bakery makes 200 Danish cakes that cost $2.70 each. Straub's needs a 66% markup on cost and normally discards 10% of what it makes. At what price should Straub's sell the Danish cakes?

A) $4.48
B) $4.98
C) $4.84
D) $4.89
E) None of these

Question 48

Contribution margin is:

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

Question 49

Lester Co. produces toy kites. It has a fixed cost of $62,150. If the selling price per unit is $9.50 and the variable cost per unit is $6.25, the breakeven point is:

A) $9,207
B) 6,542
C) 22,600
D) 29,860
E) None of these

Question 50

At the end of the summer, Walgreens advertised blow-up pools for 66% off the regular price. Jeff Jones saw a pool with a regular price of $49.99. The dollar markdown is:

A) $39.29
B) $32.99
C) $33.99
D) $33.39
E) None of these

Question 51

Johnny Mac's Sporting Goods bought a baseball glove from Rawlings Sporting Goods for $66.00. They want to markup the glove 70% on selling price. What should Johnny's sell the glove for?

A) $113.22
B) $179.82
C) $246.42
D) $222.00
E) None of these

Question 52

A wooden duck with a regular selling price of $125.99 is marked down to $79.99. The percent of markdown is:

A) 57.51%
B) 36.51%
C) 35.61%
D) 55.71%
E) None of these

Question 53

Camille Keegan sells lamps for $105.55 that cost her $75.00. Camille's percent of markup based on the selling price is:

A) 38.9%
B) 28.94%
C) 40.73%
D) 40.37%
E) None of these

Question 54

Bill Angel marks up his goods 38% on cost. A Nikon camera cost Bill $410. What is Bill's selling price?

Question 55

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

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

Question 56

A local Dunkin' Donuts makes blueberry muffins that cost $.69 each. Past experience shows that 15% of the muffins will spoil and have to be discarded. Assuming that this shop wants a 30% markup based on cost and produces 200 muffins, each muffin should sell for:

A) $.90
B) $.91
C) $1.50
D) $1.06
E) None of these

Question 57

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?

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

Question 58

Belle's Bake Shop makes croissants that cost $1.75 each. Past experience shows that 10% of the croissants will spoil and have to be discarded. Assuming Belle wants a 45% markup based on cost and produces 300 croissants, each croissant should sell for:

A) $2.28
B) $2.54
C) $2.45
D) $2.82
E) None of these

Question 59

Mr. Small, the store manager for Jay's Appliance, is having a difficult time placing a selling price on a refrigerator that cost $410. Mr. Small knows his boss would like to have a 45% markup based on cost. The selling price should be:

A) $745.45
B) $754.54
C) $594.50
D) $549.50
E) None of these

Question 60

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:

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

Question 61

Jingle Corporation produces toy footballs. Each football sells for $9.95 with a variable unit cost of $7.10. Assuming a fixed cost of $11,400 what is Jingle's breakeven point?

Question 62

Talbot's sells ladies sport coats for $99.99 that cost $65.50. What is the percent markup on cost? Round to nearest hundredth percent. Verify the cost.
52.66%

Question 63

French Co. marks up its goods 45% on cost. What is French's equivalent markup on selling price? Round to the nearest hundredth percent.

Question 64

28% markup on selling price
Actual cost $900
Selling price?

Question 65

Francis's Bakeshop makes cupcakes that cost $.95 each. Francis knows that 20% of the cupcakes will spoil. Assume Francis wants a 35% markup on cost and produces 60 cupcakes. What should Francis charge for each cupcake? Round to the nearest cent.

Question 66

May's Bakeshop makes triple chocolate brownies that cost $1.50 each. Past experience shows that 20% of the brownies will spoil. Assuming May wants a 40% markup based on cost and produces 200 brownies, what should each brownie sell for?

Question 67

Bill's Hardware marks up snow blowers $130 and sells them for $485. Markup is on cost. What are the cost and percent markup to the nearest hundredth percent?

Question 68

Al's Hat Shop bought a hat for $95. Al wants to markup the hat by 55% of the selling price. What should the selling price of the hat be?

Question 69

Pat Maninan, a customer of Brown Co., will pay $400 for a new kitchen table. Brown has a 55% markup on the selling price. What is the most Brown can pay for this kitchen table?

Question 70

A video game sells at Arnolds for $199.95. Arnolds marks the game up at 30% of the selling price. What was the cost of the video game to Arnolds?

Question 71

Calculate the total cost, total sales, and selling price per unit.

Question 72

26% markup on selling price Actual cost $700
Selling price?

Question 73

Calculate the total cost, total sales, and selling price per unit.

A. $32.50 (50 × $.65)
B. $43.88
C. $1.10

Question 74

Convert a 40% markup percent on cost to markup percent on selling price. (Round to the nearest hundredth percent.)