Question

The cost of production of a wireless set was $ 40,000.00, The manufacturer sold it to a wholesaler for at profit of 20% . The wholesaler also sold it to retailer at a profit of 25%. The retailer marked the set to be sold at price 50% above above what he paid for it.
a. Find the marked price
b. To a customer who paid cash, the retailer reduced the price to $ 75000.00. Find the percentage discount.

Answer 1

Cost chain:
- Manufacturer → wholesaler: 40,000 × 1.20 = 48,000
- Wholesaler → retailer: 48,000 × 1.25 = 60,000
- Retailer marks up 50%: 60,000 × 1.50 = 90,000

a. Marked price = $90,000.00

b. Cash price = $75,000.00, so discount = 90,000 − 75,000 = 15,000.
Percentage discount = 15,000 / 90,000 = 1/6 = 16 2/3% ≈ 16.67%.