Term
1. Your college bookstore buys legal pads for $1.50 each and sells them at the retail price of $2.00. The markup percentage is
a. 25 percent.
b. 33.3 percent.
c. 50 percent.
d. 1.33 percent.
e. 75 percent. |
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Definition
| 1. A (remember, markup is assumed to be stated as a percent of selling price rather than cost). |
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Term
As a manufacturer of Sardines, you are interested in finding out if you can sell your product to wholesalers for at least $1. You know that retailers typically use a 40% markup and sell the product for $2.00. If the wholesaler uses a 20% markup, how much can you charge the wholesaler for your sardines? (Assume the channel is a basic manufacturer - wholesaler - retailer
a. No more than $0.96
b. No less than $0.96
c. No more than $1.19
d. None of the above |
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Definition
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Term
A product is priced to sell for $12 with a variable cost of $8 per unit. The company expects to earn a profit of $400,000 with its total fixed costs of $120,000. The minimum number of units that must be sold in order to reach this target return is
a. 400,000.
b. 130,000.
c. 120,000.
d. 80,000.
e. 50,000 |
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Definition
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Term
You are considering opening a fast-food store. Your initial costs are $300,000 for land, $500,000 for the building and parking lot paving, $150,000 for kitchen equipment, and $50,000 for the neon sign. Each serving will cost $1.50 for food and $0.39 for packaging. If you set the selling price at $2.89 per meal, how much REVENUE must you make to break even?
a. 1,200,000
b. 2,890,000
c. 189,000
d. 1,000,000
e. None of the above. |
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Definition
| 4. B (remember, if I ask for revenue, you have to multiply units by selling price). |
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