Problema Solution
A Honda dealer sells a new Accord for $21,830. This price is an 18% markup over dealer cost, what was the dealer's cost?
Answer provided by our tutors
We need to convert the mark up into margin.
Mark up is 18% of cost so margin is 18 / 118
The gross profit is 21830 x 18 / 118 = 3330
So the dealer cost is 21830 - 3330 = 18500$