MAT112 BUSINESS MATHEMATICS

CHAPTER 8 (MATHEMATICS OF RETAILING)

1. The Sweet Garden Company bought 80 roses at RM8 each and 40 sunflowers at RM6
each. The company wanted a net profit of 15% based on the cost. The operating
expenses for all the flowers are 10% based on the cost for all the flowers.
i) Find the total selling price for all the flowers [RM1100]
(80×8)+(40×6)= RM880
880(0.1)=RM88
SP=880(0.15)+88= RM1,100
ii) Find the gross profit for all the flowers [RM220]
GP=1100-880=RM220
iii) Find the breakeven price for all the flowers [RM968]
BEP= 880+88
=RM968
iv) Find the maximum percentage of markdown that can be offered without incurring any
loss. [12%]
(Q4(b) Oct 2012)
MDmax=1100-968
=RM132
𝟏𝟑𝟐
%MDmax= ×100
𝟏𝟏𝟎𝟎

=12%

2. The Strawberry Candy Company wants to produce limited edition special candy for the
New Year celebration. The company decides to produce only 1000 limited edition candy
at a cost of RM12500. The net profit for each candy is 15% based on cost and the total
operating expenses for the candies is RM555.50.
i) What is the selling price for each candy? [RM14.93]
NP=12500(0.15)
=RM1875
SP=12500+555.50+1875
=RM14930.50
Each candy = 14930.50 ÷ 1000
=RM14.93

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 ii) Calculate the total gross profit for the candies. [RM2430.50]
GP=14930.50-12500
=RM2430.50
iii) Find the breakeven price for the candies. [RM13055.50]
BEP=12500+555.50
=RM13055.50
iv) What is the maximum percentage of markdown that can be offered without incurring
any loss? [12.56%]
(Q4(b) March 2012)
MDmax=14930.50-13055.50
=RM1875
𝟏𝟖𝟕𝟓
%MDmax=𝟏𝟒𝟗𝟑𝟎.𝟓𝟎×100

=12.56%

3. An owner of a sundry shop received an invoice for the purchase of 200 bottles of liquid
detergent at RM15.00 each and 300 bottles of liquid fabric softener at RM8.00 each the
invoice was dated 6 August 2010. He was offered trade discounts of 10% and 8%, and
cash discount terms of 10/10, 5/20, n/30. The dealer paid the invoice on 21st August
2010.
i) Find the amount of payment on 21st August 2010.
(200×15)+(300×8)=RM5,400
5400(1-0.10)(1-0.08)(1-0.05)
=RM4247.64
ii) Calculate the net price of a bottle of liquid soap detergent.
NP=15(1-0.1)(1-0.08)
=RM12.42
iii) Calculate the net price of a bottle of liquid fabric softener.
NP=8(1-0.1)(1-0.08)
=RM6.62
iv) Find the total amount of markup if the dealer wanted a net profit of 10% based on
cost for all items and operating expenses of 15% based on cost for all items.
MU=5400+(5400×0.15)+(5400×0.1)-5400
=5400+810+540-5400
=RM1350

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 Find the selling price of a bottle of liquid soap detergent.
SP=15+(15×0.15)+(15×0.1)
=RM18.75
v) Find the selling price of a bottle of liquid fabric softener.
(Q3(b) Sept2011)
SP=8+(8×0.15)+(8×0.1)
=RM10
4. A housewife bought 30 Thai silk baju kurung for her own business listed at RM6,000 with
trade discount of 15% and 10%. If she sold that baju kurung at a net profit of 25% based
on cost and the operating expenses were 3% on cost, find
i) The amount paid by the housewife.
6000(1-0.15)(1-0.1)
=RM4590
ii) The selling price for each baju kurung.
SP=4590+(4590×0.25)+(4590×0.03)
=4590+1147.50+137.70
=RM5875.20÷30
=RM195.84
iii) The maximum percentage of markdown that can be offered so that the housewife
would not suffer any lose.
(Q4(b) April2010)
MDmax=5875.20-(4590+137.70)
=5875.20-4727.70
=RM1147.50
𝟏𝟏𝟒𝟕.𝟓𝟎
%MDmax= ×100
𝟓𝟖𝟕𝟓.𝟐𝟎

=19.53%
5. A retailer purchased 20 toasters at a list price of RM40 each and was offered trade
discounts of 10%, 8%. He then sold the toasters with a gross profit of 75% based on the
cost. lf the operating expenses was 15% based on the selling price, find:
i) the net price of each toaster after the trade discounts. (RM33.12)
(40×20)(1-0.1)(1-0.08)
=RM662.40÷20
=RM33.12

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 ii) the selling price of each toaster. (RM57.96)
SP=33.12+(33.12×0.75)
=RM57.96
iii) the breakeven price of each toaster. (RM41.81)
BEP=33.12+(57.96×0.15)
=RM41.81
iv) the maximum markdown % of each toaster that could be given without incurring any
loss. (max MD = 27.86%)
(Q4(a) Oct2010)
MDmax=57.96-41.81
=RM16.15
𝟏𝟔.𝟏𝟓
%MDmax=𝟓𝟕.𝟗𝟔×100

=27.86%
6. The owner of Perabut Alaf Baru bought a living room set at RM2800. The operating
expenses of selling the set are 25% of the cost. If the seller wants a net profit of 15% of
the cost, calculate the:
i) selling price of the living room set (RM3920)
SP=2800+(2800×0.25)+(2800×0.15)
=RM3920
ii) gross profit obtained (RM 1120)
GP=SP-C
=3920-2800
=RM1120
iii) breakeven price (RM 3500)
BEP=2800+(2800×0.25)
=RM3500
iv) maximum percentage of markdown that can be offered without incurring any loss
(10.71%)
MDmax=3920-3500
=RM420
𝟒𝟐𝟎
%MDmax= ×100
𝟑𝟗𝟐𝟎

=10.71%

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 v) If the seller sets the selling price at RM3600, what is the net profit (RM100)
(Q4(b) apr2010)
NP=3600-3500
=RM100
7. A grocer bought 500 plums for RM200. He sold 80% of the plums at 75 cents each and
the remaining plums at a discounted price. If he managed to obtain a gross profit of 75%
based on the entire cost, find:
i) The discounted price. (RM0.50)
500×75%=400
400×0.75=300
200×0.75=RM150
200+150-300=RM50
RM50÷100=RM0.50
ii) the percentage mark up of the discounted price based on cost.(25%)
RM200÷500=RM0.40
0.5-0.4=RM0.10
𝟎.𝟏
%MU=𝟎.𝟒×100

=25%
iii) the percentage of markdown for the discounted price.(33.33%)
(Q4(b) oct2009)
0.75-0.5=RM0.25
𝟎.𝟐𝟓
%MU= ×100
𝟎.𝟕𝟓

=33.33%

8. Shu-Shu shoe company bought 100 pairs of shoes for RM2750. The company wanted a
gross markup and net profit of 20% and 15% of the cost respectively.
i) Find the selling price for a pair of shoe.(RM33)
2750÷100=RM27.50
SP=27.50+(27.5×0.2)
=RM33

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 ii) Find the operating expenses for a pair of shoe.(RM1.38)
GP=27.5(0.2)
RM5.50
OE=5.5-(27.5×0.15)
=RM1.38
iii) Suppose 15 pairs were not sold. To sell off the remaining shoes, the retailer gave
20% discount from the original selling price. Find the new total gross profit.(RM451)
(Q4(b) apr2009)
SP=15(33)
=RM495
TD=495(0.2)
=RM99
NGP=(27.50×0.2×100)-99
=550-99
=RM451
9. A trader bought 20 football jerseys listed at RM5000 with trade discounts of 20% and
10%. If he sold the jerseys at a net profit of 30% based on cost and the operating
expenses were 5% on cost, find:
i) the amount paid by the trader.(RM3600)
TP=5000(1-0.2)(1-0.1)
=RM3600
ii) the selling price for each jersey.(RM243)
SP=[3600+(3600×0.3)+(3600×0.05)]÷20
=RM4860÷20
=RM243
iii) the breakeven price for each jersey. (RM189)
(Q4(b) oct2008)
BEP=[3600+(3600×0.05)]÷20
=RM189
10. A retailer bought 40 shirts at RM60 each. The shirts was sold with a markup of 55% on
cost.
i) Find the selling price of each shirt.(RM93)
SP=60+(60×0.55)
=RM93

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 ii) A month later, the retailer reduced the price of the shirt by 33%.Find the new selling
price.(RM62.31)
(Q4(a) apr2008)
NSP=93-(93×0.33)
=RM62.31
11. A retailer bought 10 mowing machines at RM888 each. He was offered trade discounts
of 10%,5% and the credit terms were 4/10, n/30. He also had to pay RM60 for
transportation costs. Later, he sold these machines with a markup of 30% on selling
price. For each machine, the net profit obtained was RM95. Find
i) the total payment made for all the machines ten days from the date of
invoice.(RM7348.70)
TP=(888×10)(1-0.1)(1-0.05)(1-0.04)+60
=RM7348.70
ii) its selling price.(RM1049.81)
SP=7348.70+(7348.70×0.3)÷10
=RM
iii) its break even price. (RM954.81)
iv) its maximum markdown rate that can be offered without incurring any loss.(9.05%)
v) the amount that the retailer would gain or loss if he offered a discount of 10%.(loss:
RM9.98)
(Q4(b) apr2008)

12. A retailer bought a treadmill for RM2000. Operating expenses incurred were 5% based
on cost. The retailer wanted a 10% net profit based on cost. Find
i) the selling price (RM2300)
SP=2000+(2000×0.05)+(2000×0.1)
=RM2300
ii) markup percent based on the selling price (13.04%)
𝟑𝟎𝟎
%MU=𝟐𝟑𝟎𝟎×100

=13.04%
iii) the breakeven price(RM2100)
BEP=2000+(2000×0.05)
=RM2100

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 iv) the new selling price and the total net profit or loss if the retailer sold the treadmill at
10% markdown. (RM2070, loss RM30)
(Q4(b) oct2007)
MD=2300-(2300×0.1)
=RM2070
NP/L=2100-2070
=RM30 Loss

13. A retailer bought 25 swimming suits. A gross profit of 45% based on cost is made if the
suits were sold at RM150 each. The operating expenses were 15% based on cost.
i) Find the total cost. (RM2586.21)
150×25=RM3,750
C=3,750-(C×0.45)
3,750=1.45C
C=RM2586.21
ii) Find the net profit if all the suits were sold. (RM775.86)
GP=2586.21(0.45)
=RM1,163.79
OE=2586.21(0.15)
=RM387.93
NP=1,163.79-387.93
=RM775.86
iii) Suppose 5 suits were not sold. To sell off the remaining suits, the retailer gave 20%
discount from the original selling price. Find the total gross profit. (RM1013.79)
(Q4(b) apr2007)
SP=5(150)
=RM750
TD=750×0.2
=RM150
TGP=1163.79-150
=RM1013.79

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 14. The PC Depo Trading received an invoice dated 22nd September 2005 for the purchase
of 15 units of printers. The invoice was worth RM9800 including the transportation cost
and insurance charges of RM 260. The invoice offered a 6% trade discount and cash
discount terms of 3/15,2/25,n/30. The invoice was paid on 7th October 2005.
i) Calculate the amount of payment made on the settlement date. (RM8958.57)
TP=(9800-260)(1-0.06)(1-0.03)
=9540(0.94)(0.97)
=8,698.57+260
=RM8958.57
PC Depo Trading estimated a net profit of 15% on the selling price. If the operating
expenses were 7% based on the cost, find:
ii) the selling price of each printer (RM751.82)
SP=[8958.57+(SP×0.15)+(8958.57×0.07)]÷15
=9585.67+0.15SP÷15
0.85SP=9585.67÷15
SP=RM751.82
iii) the breakeven price of each printer (RM639.05)
BEP=[8958.57+(8958.57×0.07)] ÷15
=RM639.05
iv) the maximum percentage of markdown that can be offered so the trader would not
suffer any loss. (15%)
(Q4(a) oct2006)
MDmax=751.82-639.05
=RM112.77
𝟏𝟏𝟐.𝟕𝟕
%MDmax=𝟕𝟓𝟏.𝟖𝟐×100

=15%

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 15. Steady Music Center purchased 10 units of the original CD at RM29.90 each. If the
seller wishes to make a net profit of 12% based on the selling price and the operating
expenses were RM3 per unit, find:
i) the selling price of each original CD. (RM37.39)
SP=29.90+3+(SP×0.12)
0.88SP=32.9
SP=RM37.39
ii) the total gross profit made by the seller. (RM74.90)
(Q4(b) oct2006)
GP=(37.39-29.9)×10
=RM74.90

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