TUTORIAL 3.

2: MARKUP & MARKDOWN

REVIEW QUESTIONS

1. An item is bought for RM280. The retailer sells the item at a 10% discount but still maintains
a gross profit of 20% on the net retail price. At what price did he list the item? (RM388.89)

2. Jef Company bought a generator for RM4,000. The company wanted to sell the generator by
making a gross profit of 32% based on the selling price. If the operating expenses were 10%
of the cost, find
a) the selling price of the generator. (RM5,882.35)
b) the maximum markdown percent that can be offered without incurring any loss. (20.1%)

3. A dealer purchases 20 dresses for RM4,256. She wants a net profit of 30% based on the selling
price. If the operating expenses are 12% based on the cost, determine
a) the selling price of a dress. (RM340.48)
b) the gross profit of a dress (RM127.68)
c) the breakeven price of a dress. (RM238.34)

4. A dealer makes a net profit of 40% based on cost when he sells a computer for RM1,350. If
the operating expenses incurred are 10% of the cost, find
a) the cost of the computer. (RM900)
b) the breakeven price of the computer. (RM990)

5. A dealer bought a radio for RM110. He wishes to obtain a net profit of RM40 from the sale of
the radio. Operating expenses will amount to 25% of the selling price.
a) What should be the selling price of the radio? (RM200)
b) What is the breakeven price of the radio? (RM160)

6. A retailer buys 200kg of carrots for RM50.40. 10% of the carrots are spoilt and thrown away.
If the retailer wants a 60% markup based on the retail price, find the retail price of the carrots.
(RM0.70 per kg)

7. Ah Chong, a vegetable seller buys 300kg of spinach at 40 cent per kg. He expects 5% spoilage
and plans to make 60% markup based on total cost. What price per kg should Ah Chong charge
his customer? (RM0.67 per kg)

8. A grocer buys 100kg bananas to sell. Experience indicates that about 10% of these bananas
will be spoilt before they are sold. To obtain a margin of 50% on overall cost, he prices the
bananas at RM3.00 per kg. How much do the bananas cost per kg? (RM1.80 per kg)

9. A retailer purchases 100 packets of melon seeds for RM20. Twenty packets are spoilt and
discarded. If the retailer wants a 40% markup based on his overall cost, how much must he
price each packet? (RM0.35 per packet)

10. After a 20% markup on cost, a book is sold for RM49. Find the operating expenses if the net
profit is RM4.30. (RM3.87)