Deck 8: Markups and Markdowns: Perishables and Breakeven Analysis

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

Selling price = cost - markup.

Answer 3

False

Question 4

Dollar markdowns represent price increases to the original selling price.

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

Gross profit plus operating expenses equals net income.

Question 12

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

Question 13

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

Question 14

Calculate the final selling price to the nearest cent (round each calculation to nearest cent as needed):

Question 15

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

Question 16

Operating expenses are the unusual expense of doing business.

Question 17

Markup represents an amount needed to cover operating expenses.

Question 18

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

Question 19

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

Question 20

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

Question 21

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 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

(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 24

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 25

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 26

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 27

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 28

Contribution margin is selling price plus unit cost.

Question 29

Breakeven point is fixed cost divided by contribution margin.

Question 30

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 31

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 32

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 33

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 34

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 35

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 36

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 37

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 38

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 39

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

Question 40

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 41

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 42

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 43

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 44

Kohl's sells watches that cost it $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 45

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 46

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 47

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 48

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)$220.00
E)None of these

Question 49

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 50

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 51

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 52

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:

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

Question 53

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 54

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 55

Lester Co. produces toys 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 56

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 57

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 58

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 59

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 60

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 61

Blue Jeans, Inc., sells jeans that cost $15.99 for a selling price of $42.95. What is the percent of markup based on cost? (Round to the nearest hundredth percent.)

Question 62

A toaster is marked up $10 and sells for $45.00. Find the cost and percent markup if the markup is based on cost. (Round to the nearest hundredth percent.)