BUSINESS MATH Exam 4Continued PP 559579 11 Fill in each blan

BUSINESS MATH Exam 4-Continued PP. 559-579 11. Fill in each blank with the following term that best deseribes the situation: markup, markup rate, overhead, net profit, net profit rate, and mark down. S Arnie made $800,000 after deducting expenses when he sold his helicopter. Clancey pays $0.50 more for a donut than it costs the baker to make it. Mrs. Edna sells pencils to forgetful students for $0.25 below regular price. Luigi spends $7,000 each week to operate his pizzaria. -Moe pays 50% more for Diet Duff Cola than it costs the Cola Company. - Mr. Krusty sells burgers for 500% profit after deducting expenses. Tim and Helen are hosting a bake sale. The ingredients to make one dozen cupcakes cost $9.50. All baking supplies, except ingredients, and energy costs are donated. Tim and Helen price the cupcakes at $3.50 each. What is the markup rate on the cupcakes? pp. 561-562 12. pp. 566-568 13. Arthur builds and sells puppets. To create his popular Gabbo puppet, Arthur purchases a 10-puppet supply kit (one kit makes 10 puppets) for $48.20. He sells the Gabbo puppets for $58.85 and estimates the overhead expenses are 20% of the selling price, what is the net profit rate per Gabbo puppet? Hint: Start by calculating the supply price for one puppet. (more) 30

Solution

11. Fill in each blank

12. Cost of ingredients for 12 cupcakes = $9.50

Therefore cost for 1 cupcake = $9.50/ 12 = $0.7917

Now Sale price is $3.50

Therefore mark up = Profit / Cost

= (Sale price - Cost ) * 100 / Cost

= ($3.50 - $ 0.7917) *100 / $0.7917

= $2.7083 *100 / $0.7917

= 342.09 %

13. Cost on 10 puppet supply kit = $48.2

Therefore cost of 1 puppet supply kit = $48.2 / 10 = $4.82

Now selling price of one puppet = $58.85

Overhead Expenses = 20% of $58.85 = $11.77

Hence total cost of building puppets = supply kit cost + overhead expenses

=$4.82 + $11.77

= $16.59

Now Net Profit = Sale price - Cost price

= $58.85 - $16.59

= $42.26

Net profit rate = (Net Profit * 100) / Sale price

= (42.26 * 100) / 58.85

= 71.81%