Question

3. Clearcut Lumber sells its dimensional lumber with a markup of 60%

Answer 1

The rate of margin used is 37.5% . The cost price of the batch of plywood is $312.5. Fence post sell for $16. The selling price was $133.33

Margin is the difference between the Selling price and the cost price. The price at which a item is sold is called the selling price and the price at which an item is bought is called the cost price.

The given markup is 60%.

We know that margin=markup÷(1+markup)

markup=60%

Substituting the values we get the rate of margin:

$=\frac{\frac{60}{100} }{1+\frac{60}{100} } \\=\frac{60}{160}\\ =37.5$

Hence the rate of margin is 37.5 %.

Selling price for the plywood=$500

We know that selling price=cost price ÷(1-margin)

Let the cost price be x

$x=500(1-\frac{37.5}{100} )\\x=312.50$

The cost price is $ 312.50 .

Now cost of fence = $10

Selling price of fence=cost price÷(1-margin)

substituting the values we get:

Selling price =10÷0.625

or, selling price= $16

Therefore the selling price is $16 .

Now we know that Markup percentage= profit÷ cost price

Substituting the values we get:

$60\% = \frac{50}{CP}\\or,\frac{60}{10}=\frac{50}{CP}\\or,CP=83.33$

Therefore sell price=cost price+ profit

or, sell price=83.33+50

or, sell price =133.33

The sell price is $133.33

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