Problema Solution
A shoe store owner pays a manufacturer $54 a pair for a popular brand of athletic shoes. The store offers the shoe to customers for $129 a pair. What is the markup percentage? The shoe owner decides that the shoes are not selling quickly enough. The store has a sale offering a 30% markdown on the shoes. What is the sale price?
Answer provided by our tutors
Unit Cost = $54
Sales Price = $129
Gross Profit Margin = Sales Price – Unit Cost
Gross Profit Margin = 129 - 54
Gross Profit Margin = $75
Markup Percentage = Gross Profit Margin/Unit Cost
Markup Percentage = 75/54
Markup Percentage = 1.3889 or 138.89%
After markdown of 30% the new sale price was:
(1 - 0.30)*129 = $90.30
The new sale price is $90.30.