The Flour Power Bakery makes 200 cherry cheesecakes at a cost of $2.45 each. If a spoilage rate of 5% is anticipated, at what price should the cakes be sold to achieve a 40% markup based on cost?

Answer 1

since 5% are spoiled she will have only 95% of 200 or 190 pies to sell.

cost = 2.45(200) = $490

so her return must be 490(1.4) or $686 to make a 40% profit

selling price per pie = 686/190 = $3.61

Answer 2

wrong