Question 1

A product costing $350, less 30%, 20%, and 10%, sells to allow for overhead expenses of 30% of the selling price. What is the break-even price?

Accepted Answer

A)  $252.00 
B)  $255.78 
C)  $266.40 
D)  $270.90 
E)  $291.90

Question 2

What single discount rate is equivalent to multiple discounts of 20%, 5%, 2%?

Accepted Answer

A)  25.52% 
B)  27% 
C)  63% 
D)  74.48% 
E)  23.97%

Question 3

M Studios buys cameras at a unit cost of $150. Their operating expense is 20% per unit of cost, and their desired unit operating profit is 30% of cost. What is M Studios' rate of mark-up on cost?

Accepted Answer

A)  33.3% 
B)  20% 
C)  50% 
D)  30% 
E)  25%

Question 4

An item costs $63. The selling price is set to include a profit of 25% of the selling price and estimated overhead expenses of 30% of the selling price. What is the rate of mark-up on cost?

Accepted Answer

The answer of An item costs $63. The selling price...

Question 5

A product with a wholesale price of $4,524 is sold less 49% and 17%. The retail price of the product is $3,070. Determine the mark-up on cost.

Accepted Answer

The answer of A product with a wholesale price of...

Question 6

An item costing $50 was marked up by 60% of the selling price. During a sale, the item was reduced to $75. What was the rate of markdown during the sale?

Accepted Answer

A)  6.25% 
B)  60% 
C)  40% 
D)  50% 
E)  33.3%

Question 7

An invoice dated January 22 has payment terms of 3/25, n/90. On what date would the cash discount expire?

Accepted Answer

A)  February 1 
B)  February 16 
C)  February 28 
D)  March 3 
E)  April 22

Question 8

An invoice for $10,000 dated September 10 with terms 3/10, 1½/20, n/30, EOM is received in the mail on September 25. A payment is sent on October 11 for $4,000. What is the outstanding balance?

Accepted Answer

A)  $5,940.00 
B)  $6,000.00 
C)  $5,918.37 
D)  $5,939.08 
E)  $5,920.00

Question 9

White's Photography received an e-invoice from Fuji Canada dated February 27 of a leap year. The amount of the invoice is $2,896.77 with terms $2 \frac{1}{2} / 10$ , 1/30, n/60.
a) What is the last date on which White's is eligible for the 2 $\frac{1}{2}$ % discount?
b) What amount will be required on that date to settle the invoice?
c) Instead of the payment in (b), what amount must be paid on March 29 to settle the invoice?

Accepted Answer

The answer of White's Photography received an e-invoice from Fuji...

Question 10

If the rate of mark-up on an item is 80% of cost and it is later sold after a 40% markdown, what is the rate gross profit that was actually realized?

Accepted Answer

A)  40% of cost 
B)  32% of cost 
C)  -16% of cost 
D)  8% of cost 
E)  Zero

Question 11

Ever-rest sells its mattresses for $960 less 25%. Posture-Perfect mattresses are listed at $880 less 20% and 5%. What second discount would Ever-rest need to offer to match Posture-Perfect's net price?

Accepted Answer

The answer of Ever-rest sells its mattresses for $960 less...

Question 12

If Maury's Work Warehouse sets retail prices so that mark-ups are equal to 20% of cost, what is the cost of a pair of work boots that have a retail price of $129?

Accepted Answer

A)  $108.00 
B)  $103.20 
C)  $101.91 
D)  $92.00 
E)  $86.50

Question 13

What is the cost of an item for which the retail selling price is $860 and the margin is 25% of the selling price?

Accepted Answer

A)  $215 
B)  $688 
C)  $645 
D)  $445 
E)  $1,147

Question 14

M Studios buys cameras at a unit cost of $125. Their operating expense is 45% per unit of cost, and their desired unit operating profit is 25% of cost. What is M Studios' rate of mark-up on selling price?

Accepted Answer

A)  60% 
B)  45% 
C)  25% 
D)  41.2% 
E)  40%

Question 15

Mr. and Mrs. Ogrodnik want to list their house at a price that will net them a minimum of $320,000 after a real estate commission of 5.5% of the selling price. Rounded to the nearest $100, what is the lowest offer they could accept on their home?

Accepted Answer

The answer of Mr. and Mrs. Ogrodnik want to list...

Question 16

Beaver Building Supply obtains 4- by 8-ft sheets of half-inch plywood from Macmillan Forest Products at $34 per sheet less 30% and 5%. The price is to be set to cover Beaver's overhead of 20% of the selling price and to provide an operating profit of 12% of the selling price. What should be the retail price per sheet?

Accepted Answer

The answer of Beaver Building Supply obtains 4- by 8-ft...

Question 17

Merchandise with a wholesale price of $4,926 is purchased less 55% and 22%. If the retail price is $3,074, determine the mark-up on cost.

Accepted Answer

The answer of Merchandise with a wholesale price of $4,926...

Question 18

After a trade discount of 27.5%, a jeweller can obtain ahalf carot Canadian Polar Bear diamonds for $2,138.75. What is the dollar amount of the trade discount?

Accepted Answer

The answer of After a trade discount of 27.5%, a...

Question 19

An invoice for $35,000 dated March 15 with terms 3/10, 2/20, n/30, ROG was received in the mail on March 18. The shipment of goods was received on April 3. What payment April 14 would reduce the outstanding balance to $25,000?

Accepted Answer

A)  $9,700 
B)  $10,000 
C)  $9800 
D)  $10,200 
E)  $10,300

Question 20

Rainbow Paints is discontinuing a line of paint that it purchased at $30 less 45% and 10% per 4-litre pail. The store's overhead is 50% of cost, and normal operating profit is 30% of cost. If the manager of the store is prepared to accept a loss of one-quarter of the overhead expenses, what markdown rate can the store offer in order to clear out the paint?

Accepted Answer

The answer of Rainbow Paints is discontinuing a line of...

Exam 4: Mathematics of Merchandising