The regular selling price of the jewelry is $253.00. The sale price for the jewelry is $189.75. And the rate of markdown is 25%.
A jewellery store paid a unit price of $250 less 40%, 16 1/3 %, for a shipment of designer watches . The store's overhead is 65% of cost and the normal profit is 55% of cost.
Overhead and Profit means those costs incurred by you and paid to a General Contractor to perform and oversee covered repairs to the insured location. “Overhead and Profit” does not apply to independent or specialty contractors including, but not limited to, roofers, plumbers, electricians and painters.
It is given that the unit price of the watch is $250 and the discount rates are 40%, 16 +2/3 or 16.666666667%, and 8%. Therefore the purchase price of watches per unit can be estimated as:
Purchase price of watches per unit = Unit price*(1- first discount %)(1-second discount %)(1-third discount %)
Purchase price of watches per unit = 250*(1-40%)(1-16.66666667%)(1-8%)
Purchase price of watches per unit =115
Now, the overhead expense is 65% of the cost. So the overhead amount is Overhead amount = 65% of the cost
Overhead amount = 115*65%
Overhead amount = 74.75
Now, the profit is 55% of the cost. So
Profit amount = Cost *profit %
Profit amount =115*55%
Profit amount =63.25
a. Thus, the regular selling price can be estimated as:
Regular selling price = Unit purchase cost + overhead + profit
Regular selling price =115+74.75+63.25
Regular selling price =253.00
Therefore, the regular selling price of the watches would be $253.00
b. The sale price to break even would be equal to the cost of the watch plus overhead. It is the amount that is required to cover only the total cost of the product. So,
Break-even price = Cost + overhead
Break-even price =115 + 74.75
Break-even price = 189.75
Therefore, the break-even price is $189.75.
c. From above, the regular selling price is 253.00 and the break-even price is 189.75. Thus,
Mark-down rate to sell at break-even price = (Regular selling price-Breakeven price)/Regular selling price.
Mark-down rate to sell at break-even price = (253-189.75)/253
Mark-down rate to sell at break-even price = 0.25 or 25%
Therefore, the mark-down rate is 25%.
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