Salid is selling a team jersey. The total variable cost is $16.50. The desired profit margin is 40 percent. Which is the correct price for an individual jersey?

Question

$16.50/(1-0.40)=$27.50
$16.50/(1+0.40)=$27.50
$16.50/(1*0.40)=$41.50
$16.50/(1-0.40)=$41.50

Answer 1

To calculate the selling price for the individual jersey based on the total variable cost and the desired profit margin, you can use the following formula:

Selling Price = Total Variable Cost / (1 - Desired Profit Margin)

In this case:

• Total Variable Cost = $16.50
• Desired Profit Margin = 40% = 0.40

So the calculation would be:

Selling Price = $16.50 / (1 - 0.40) Selling Price = $16.50 / 0.60 Selling Price = $27.50

Therefore, the correct price for an individual jersey is $27.50.

The correct equation from the options provided is:

$16.50 / (1 - 0.40) = $27.50