Breathe ez air conditioner filters were secured from a wholesale distributor for 17 $ each. what will the sale price be for each filter after a 24% markup?
The Correct Answer and Explanation is:
To determine the sale price of each filter after a 24% markup, we can use the formula for markup pricing:
[
\text{Sale Price} = \text{Cost Price} + (\text{Cost Price} \times \text{Markup Percentage})
]
Step 1: Identify the known values
- Cost price: $17 (the price secured from the wholesale distributor)
- Markup percentage: 24%
Step 2: Convert the markup percentage to decimal form
Since percentages are out of 100, we need to convert 24% to a decimal by dividing by 100:
[
24\% = \frac{24}{100} = 0.24
]
Step 3: Calculate the markup amount
The markup amount is calculated by multiplying the cost price by the markup percentage:
[
\text{Markup Amount} = 17 \times 0.24 = 4.08
]
Step 4: Calculate the sale price
Now that we know the markup amount, we can calculate the sale price by adding the markup to the cost price:
[
\text{Sale Price} = 17 + 4.08 = 21.08
]
Final Answer:
The sale price of each Breathe EZ air conditioner filter, after applying a 24% markup, will be $21.08.
Explanation:
In pricing strategies, the markup represents how much higher the selling price is than the cost price. Markups are typically expressed as a percentage of the cost price. In this scenario, a 24% markup means that the final sale price will be 24% higher than the wholesale cost of $17 per filter. This markup is applied to ensure a profit margin for the seller, covering costs such as overhead, storage, and other business expenses, while also providing a reasonable profit.
By calculating the markup based on the cost price and then adding it to that cost, the seller ensures that the sale price not only covers the initial investment but also contributes to profitability. This approach is common in retail and wholesale pricing strategies.