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Mr. X plans a profit of 10 percent on the selling price of

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Mr. X plans a profit of 10 percent on the selling price of [#permalink] New post 28 Nov 2003, 12:11
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Mr. X plans a profit of 10 percent on the selling price of an article. If his expenses excluding the cost of the article are 15 percent of the sales, what should his rate of mark up on the cost be (answers are in percent)
20
25
30
33 1/3
35
please explain your answer :getout
Thanx
sarnia
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 [#permalink] New post 28 Nov 2003, 13:30
30%
eq. will be:
Profit = s.p. - c.p. - expenses
10%c.p. = s.p. - c.p. - 15%s.p.
.1c.p. = .85s.p - c.p.
s.p. = 1.294 c.p.

or, around 30% over cost price
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 [#permalink] New post 28 Nov 2003, 14:09
well, the correct answer is 33 1/3.... and I 'm still lost:x
Can you explain how to calculate the mark up
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 [#permalink] New post 28 Nov 2003, 14:24
wow...m doin too many mistakes :(

you are right, ans should be 33.333333333%

profit should be 10% of sp...I used CP. my bad.

eq. will be:
Profit = s.p. - c.p. - expenses
10%s.p. = s.p. - c.p. - 15%s.p.
.1s.p. = .85s.p - c.p.
c.p. = .75s.p
s.p. = 4/3 of cp.

means, 1.333333 times c.p. or 33.33% over CP.
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 [#permalink] New post 28 Nov 2003, 22:51
it's friday - i feel the same way - we should be out this day of the week! need to relax the brain.
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 [#permalink] New post 13 Jan 2004, 22:22
what is the meaning of this
what should his rate of mark up on the cost be
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 [#permalink] New post 13 Jan 2004, 22:34
How much ( in % ) should the cost be increased by to get the intended profit figure.

I just picked numbers and it seems so much easier.

Let 100$ be the sales price
You want to be left with a profit of 10$
The problem also states that expenses are 15% of sales price = 15$
Therefore, the rest, 100$ - 10$ - 15$ = 75$ which must be the cost of the product.
To find the markup, --> 25$ / 75$ = 33.3%
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 [#permalink] New post 13 Jan 2004, 22:48
Hi Paul,

I did this

C + E + P = S
E = 0.15S P = 0.1S
C = 0.75S

So S = 4/3C = 1.3333C

If the original cost is C the new cost = 1.3333C
This how you say that the cost is increased by 33.3%

cost should be markedup as 0.75 S to achieve the desired profit.
Why did you divide 25 by 75.

Sorry to bother you. I still dont get it.
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 [#permalink] New post 13 Jan 2004, 23:26
What you found was S = 4/3*C and you just substract C and you find the markup. It is a good way to solve the problem algebraically.
What I did was (S - C) / C which is another formula for finding the markup. In this case, (E + P) / C is also a valid formula to find the markup because (S - C) = (E + P) according to the very formula that you wrote. The two formulas I have really mean what is the percentage increase over cost, thus markup over cost.

E = 0.15S --- P = 0.1S --- C = .75S
Then: (E + P) / C = (0.15S + 0.1S) / .75S which again gives you the markup = 33.3%
I think it's about knowing that there are different ways of deriving markup ( besides algebraically ). Dunno if it helps.
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 [#permalink] New post 13 Jan 2004, 23:55
Hi Paul

Perfect explaination. Thanks again.
  [#permalink] 13 Jan 2004, 23:55
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