Question

Kabul’s bookshop marks up all books by 40 percent of their cost. The overhead rate is 16 percent of the selling price. What is the net profit rate on the book that costs Kahils 18.10?

Answer 1

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

Now, According to question

mark up percentage = $\dfrac{s.p - c.p}{c.p}$

I.e 40% =  $\dfrac{s.p - 18.10}{18.10}$

Or, $\dfrac{40}{100}$ + 1 = $\dfrac{s.p}{18.10}$

Or, $\dfrac{140}{100}$ =  $\dfrac{s.p}{18.10}$

Or, s. p = $\dfrac{140\times 18.10}{100}$

∴ s.p = $25.34

So, selling price of book = s.p = $25.34

Now, The overhead percentage = 16%

i.e overhead rate = $\dfrac{\textrm estimated cost}{\textrm estimated total base unit}$

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% = $\dfrac{\textrm profit}{\textrm estimated cost}$

I.e The profit rate% = $\dfrac{21.29}{4.05}$

∴ profit rate %= 5.41

So, The profit rate = p = 5.41

Hence, The net profit rate on the book is 5.41  Answer