Answer:
The net profit rate on the book is 5.41
Step-by-step explanation:
Given as :
The marks up percentage of book = m = 40%
The overhead rate is 16% of selling price
The cost price of book = c.p = $18.10
Let The profit = $p
Let The selling price = s.p
<u>Now, According to question</u>
mark up percentage = ![\dfrac{s.p - c.p}{c.p}](https://tex.z-dn.net/?f=%5Cdfrac%7Bs.p%20-%20c.p%7D%7Bc.p%7D)
I.e 40% = ![\dfrac{s.p - 18.10}{18.10}](https://tex.z-dn.net/?f=%5Cdfrac%7Bs.p%20-%2018.10%7D%7B18.10%7D)
Or,
+ 1 = ![\dfrac{s.p}{18.10}](https://tex.z-dn.net/?f=%5Cdfrac%7Bs.p%7D%7B18.10%7D)
Or,
= ![\dfrac{s.p}{18.10}](https://tex.z-dn.net/?f=%5Cdfrac%7Bs.p%7D%7B18.10%7D)
Or, s. p = ![\dfrac{140\times 18.10}{100}](https://tex.z-dn.net/?f=%5Cdfrac%7B140%5Ctimes%2018.10%7D%7B100%7D)
∴ s.p = $25.34
So, selling price of book = s.p = $25.34
Now, The overhead percentage = 16%
i.e overhead rate = ![\dfrac{\textrm estimated cost}{\textrm estimated total base unit}](https://tex.z-dn.net/?f=%5Cdfrac%7B%5Ctextrm%20estimated%20cost%7D%7B%5Ctextrm%20estimated%20total%20base%20unit%7D)
Or, estimated cost = 16% × 25.34
I,e estimated cost = 0.16 × 25.34
∴ estimated cost = $4.05
Now,
Profit = selling price of book - estimated book cost
I.e p = $25.34 - $4.05
∴ p = $21.29
So, The profit rate% = ![\dfrac{\textrm profit}{\textrm estimated cost}](https://tex.z-dn.net/?f=%5Cdfrac%7B%5Ctextrm%20profit%7D%7B%5Ctextrm%20estimated%20cost%7D)
I.e The profit rate% = ![\dfrac{21.29}{4.05}](https://tex.z-dn.net/?f=%5Cdfrac%7B21.29%7D%7B4.05%7D)
∴ profit rate %= 5.41
So, The profit rate = p = 5.41
Hence, The net profit rate on the book is 5.41 Answer