Select The Correct Answer.What Is The Selling Price Of An Item If The Original Cost Is $784.50 And The Markup On The Item Is 6.5 Percent? A. $509.95 B. $831.57 C. $835.49

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Understanding the Problem

When a business sells an item, it often adds a markup to the original cost to determine the selling price. The markup is a percentage of the original cost, and it's used to calculate the profit made on the sale. In this problem, we're given the original cost of an item, which is $784.50, and the markup percentage, which is 6.5%. We need to calculate the selling price of the item.

Calculating the Markup Amount

To calculate the selling price, we first need to find the markup amount. The markup amount is calculated by multiplying the original cost by the markup percentage. In this case, the markup percentage is 6.5%, which can be written as 0.065 in decimal form.

Markup Amount = Original Cost x Markup Percentage
Markup Amount = $784.50 x 0.065
Markup Amount = $51.00

Calculating the Selling Price

Now that we have the markup amount, we can calculate the selling price by adding the markup amount to the original cost.

Selling Price = Original Cost + Markup Amount
Selling Price = $784.50 + $51.00
Selling Price = $835.50

Comparing the Calculated Selling Price with the Options

Now that we have calculated the selling price, we can compare it with the options given in the problem.

  • Option A: $509.95
  • Option B: $831.57
  • Option C: $835.49

Our calculated selling price is $835.50, which is closest to option C: $835.49.

Conclusion

In conclusion, the selling price of the item is $835.49, which is option C. This is the correct answer to the problem.

Understanding the Importance of Markup in Business

Markup is an essential concept in business, as it determines the profit made on the sale of an item. A higher markup percentage means a higher profit margin, but it also means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup percentage with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Calculating Markup Percentage

To calculate the markup percentage, we can use the following formula:

Markup Percentage = (Markup Amount / Original Cost) x 100

For example, if the markup amount is $51.00 and the original cost is $784.50, the markup percentage can be calculated as follows:

Markup Percentage = ($51.00 / $784.50) x 100
Markup Percentage = 6.5%

Understanding the Impact of Markup on Profit

Markup has a significant impact on the profit made by a business. A higher markup percentage means a higher profit margin, but it also means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup percentage with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Calculating Profit

To calculate the profit made by a business, we can use the following formula:

Profit = Selling Price - Original Cost

For example, if the selling price is $835.50 and the original cost is $784.50, the profit can be calculated as follows:

Profit = $835.50 - $784.50
Profit = $51.00

Conclusion

In conclusion, markup is an essential concept in business, as it determines the profit made on the sale of an item. A higher markup percentage means a higher profit margin, but it also means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup percentage with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Calculating the Selling Price with Different Markup Percentages

Let's calculate the selling price with different markup percentages.

  • Markup Percentage: 5% Markup Amount = $784.50 x 0.05 Markup Amount = $39.22 Selling Price = $784.50 + $39.22 Selling Price = $823.72

  • Markup Percentage: 7% Markup Amount = $784.50 x 0.07 Markup Amount = $54.92 Selling Price = $784.50 + $54.92 Selling Price = $839.42

  • Markup Percentage: 8% Markup Amount = $784.50 x 0.08 Markup Amount = $62.76 Selling Price = $784.50 + $62.76 Selling Price = $847.26

Conclusion

In conclusion, the selling price of an item depends on the markup percentage. A higher markup percentage means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup percentage with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Calculating the Selling Price with Different Original Costs

Let's calculate the selling price with different original costs.

  • Original Cost: $784.50 Markup Amount = $784.50 x 0.065 Markup Amount = $51.00 Selling Price = $784.50 + $51.00 Selling Price = $835.50

  • Original Cost: $784.50 + $100 Original Cost = $884.50 Markup Amount = $884.50 x 0.065 Markup Amount = $57.49 Selling Price = $884.50 + $57.49 Selling Price = $941.99

  • Original Cost: $784.50 - $100 Original Cost = $684.50 Markup Amount = $684.50 x 0.065 Markup Amount = $44.49 Selling Price = $684.50 + $44.49 Selling Price = $729.00

Conclusion

In conclusion, the selling price of an item depends on the original cost and the markup percentage. A higher original cost means a higher selling price, which may affect the demand for the item. Businesses need to balance their original cost with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Calculating the Selling Price with Different Markup Amounts

Let's calculate the selling price with different markup amounts.

  • Markup Amount: $51.00 Original Cost = $784.50 Selling Price = $784.50 + $51.00 Selling Price = $835.50

  • Markup Amount: $51.00 + $10 Markup Amount = $61.00 Selling Price = $784.50 + $61.00 Selling Price = $845.50

  • Markup Amount: $51.00 - $10 Markup Amount = $41.00 Selling Price = $784.50 + $41.00 Selling Price = $825.50

Conclusion

In conclusion, the selling price of an item depends on the markup amount. A higher markup amount means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup amount with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Calculating the Selling Price with Different Selling Prices

Let's calculate the selling price with different selling prices.

  • Selling Price: $835.50 Original Cost = $784.50 Markup Amount = $51.00 Markup Percentage = (Markup Amount / Original Cost) x 100 Markup Percentage = (51.00 / 784.50) x 100 Markup Percentage = 6.5%

  • Selling Price: $835.50 + $10 Selling Price = $845.50 Markup Amount = $845.50 - $784.50 Markup Amount = $61.00 Markup Percentage = (Markup Amount / Original Cost) x 100 Markup Percentage = (61.00 / 784.50) x 100 Markup Percentage = 7.8%

  • Selling Price: $835.50 - $10 Selling Price = $825.50 Markup Amount = $825.50 - $784.50 Markup Amount = $41.00 Markup Percentage = (Markup Amount / Original Cost) x 100 Markup Percentage = (41.00 / 784.50) x 100 Markup Percentage = 5.2%

Conclusion

In conclusion, the selling price of an item depends on the markup percentage. A higher markup percentage means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup percentage with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Q: What is markup and how is it used in business?

A: Markup is the amount added to the original cost of an item to determine the selling price. It's a percentage of the original cost, and it's used to calculate the profit made on the sale of an item.

Q: How do I calculate the markup amount?

A: To calculate the markup amount, you multiply the original cost by the markup percentage. For example, if the original cost is $784.50 and the markup percentage is 6.5%, the markup amount would be:

Markup Amount = Original Cost x Markup Percentage Markup Amount = $784.50 x 0.065 Markup Amount = $51.00

Q: How do I calculate the selling price?

A: To calculate the selling price, you add the markup amount to the original cost. For example, if the original cost is $784.50 and the markup amount is $51.00, the selling price would be:

Selling Price = Original Cost + Markup Amount Selling Price = $784.50 + $51.00 Selling Price = $835.50

Q: What is the difference between markup and profit?

A: Markup is the amount added to the original cost to determine the selling price, while profit is the amount made on the sale of an item after deducting the original cost and other expenses. For example, if the selling price is $835.50 and the original cost is $784.50, the profit would be:

Profit = Selling Price - Original Cost Profit = $835.50 - $784.50 Profit = $51.00

Q: How do I calculate the markup percentage?

A: To calculate the markup percentage, you divide the markup amount by the original cost and multiply by 100. For example, if the markup amount is $51.00 and the original cost is $784.50, the markup percentage would be:

Markup Percentage = (Markup Amount / Original Cost) x 100 Markup Percentage = (51.00 / 784.50) x 100 Markup Percentage = 6.5%

Q: What is the impact of markup on profit?

A: A higher markup percentage means a higher profit margin, but it also means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup percentage with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Q: How do I calculate the selling price with different markup percentages?

A: To calculate the selling price with different markup percentages, you multiply the original cost by the new markup percentage and add the result to the original cost. For example, if the original cost is $784.50 and the new markup percentage is 7%, the selling price would be:

Markup Amount = Original Cost x New Markup Percentage Markup Amount = $784.50 x 0.07 Markup Amount = $54.92 Selling Price = Original Cost + Markup Amount Selling Price = $784.50 + $54.92 Selling Price = $839.42

Q: How do I calculate the selling price with different original costs?

A: To calculate the selling price with different original costs, you add the markup amount to the new original cost. For example, if the original cost is $784.50 and the new original cost is $884.50, the selling price would be:

Markup Amount = New Original Cost x Markup Percentage Markup Amount = $884.50 x 0.065 Markup Amount = $57.49 Selling Price = New Original Cost + Markup Amount Selling Price = $884.50 + $57.49 Selling Price = $941.99

Q: How do I calculate the selling price with different markup amounts?

A: To calculate the selling price with different markup amounts, you add the new markup amount to the original cost. For example, if the original cost is $784.50 and the new markup amount is $61.00, the selling price would be:

Selling Price = Original Cost + New Markup Amount Selling Price = $784.50 + $61.00 Selling Price = $845.50

Q: How do I calculate the selling price with different selling prices?

A: To calculate the selling price with different selling prices, you subtract the original cost from the new selling price. For example, if the original cost is $784.50 and the new selling price is $845.50, the markup amount would be:

Markup Amount = New Selling Price - Original Cost Markup Amount = $845.50 - $784.50 Markup Amount = $61.00

Q: What is the importance of calculating the selling price with markup?

A: Calculating the selling price with markup is essential in business as it determines the profit made on the sale of an item. A higher markup percentage means a higher profit margin, but it also means a higher selling price, which may affect the demand for the item. Businesses need to balance their markup percentage with the demand for their products to ensure they make a profit while also selling their products at a competitive price.

Q: How do I apply the concept of markup in real-life business scenarios?

A: The concept of markup can be applied in various real-life business scenarios, such as:

  • Pricing products for sale
  • Determining the profit margin
  • Calculating the selling price with different markup percentages
  • Calculating the selling price with different original costs
  • Calculating the selling price with different markup amounts
  • Calculating the selling price with different selling prices

By understanding and applying the concept of markup, businesses can make informed decisions about pricing, profit margins, and sales strategies.