Question

500 bags of onions were purchased at $2.51 per bag. The desired markup is 43% based on selling price, but 20% spoilage is expected. What should the selling price per bag be (in $ per bag)? (Round your answer to the nearest cent.)

Answer 1

Calculation of selling price per bag will be:

Cost of 500 bags of onion

= 500×$2.51

= $1255

Spoilage of 20%= 500bags ×20%

= 100 bags spoiled

Remaining 400 bags(500bags - 100 bags ) are left to sell.

Given, Desired profit = 43%

Profit percentage

= Sales value - cost / cost

43%=( Sales units × selling price per unit )-cost /cost

0.43= (400 bags × sp per unit)- $1255/$1255

0.43 × $1255= (400bags × sp per unit)-$1255

$539.65 = (400 bags × sp per unit) - $1255

$539.65 + $1255 = 400bags × sp per unit

$1794.65 = 400 bags × sp per unit

$1794.65/400 bags = sp per unit

$4.48 = sp per unit

Selling price per bag = $4.48