Question

Epicure Market prepares fresh gourmet entrees each day. On Wednesday, 80 baked chicken dinners were made at a cost of $3.50 each. A 10% spoilage rate is anticipated. At what price should the dinners be sold to achieve a 60% markup based on selling price

Answer 1

Answer:

The price of a Dinner= $6.22

Explanation:

Mark-up is the proportion of the product cost which is expected to be made as profit. In other words, it is profit expressed as a percentage of product cost.

To account for the spoilage rate of 10%, $3.50 unit cost would be consider as 90% of the cost. Thus, 100% of the cost would be given as follows:

Dinner cost = 100/(100-10)× 3.50= 3.89

The price of a Dinner = product cost + 60% of product cost

The price of a Dinner = 3.89 + 60%*3.89= $6.22

The price of a Dinner= $6.22