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djyliett [7]
2 years ago
11

An Australian company produces boomerangs. They

Social Studies
1 answer:
Finger [1]2 years ago
5 0

Answer:

Answer = 25 dollars

Explanation:

There is A LOT of excess information in this problem. Because of this, I shall show you how much of the information actually isnt needed. The bolded text is what is important to your question:

An Australian company produces boomerangs. They

charge $24 for their standard boomerang. This covers

their cost of materials, labor, factory, and distribution,

plus 10% profit.

A foreign company makes boomerangs, and they want

to export them to Australia because they want to sell

them for less than the Australian company. Perhaps

the foreign company pays its workers less...perhaps

its taxes are less because the foreign country doesn't

provide universal healthcare and quality education.

Perhaps the foreign company just can get materials at

lower costs. In any case, to cover its production and

distribution costs, plus profit, the foreign company only

plans to charge $20 per boomerang.

Question: If the foreign company would charge $20 per boomerang, but a 25% tariff is added to the cost, how much must the foreign company now sell its boomerangs for to cover its costs?

Unless I am doing this incorrectly, only two half-sentences are needed to answer this question. :3

Now, lets sort out this information:

Each boomerang would orginally have costed $20.

The price must increase by 25% to cover the tariff(import taxes).

To answer this question, the boomerangs need to cost 25% more, or 125% of the $20 they orginally costed.

125% of 20 can be visualized as:

1.25x20(since 125% = 1.25). 1.25*20 = 25, and thus, our answer is 25.

Hope this helps! :3

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