1. Poles Apart purchased snowboards at a cost of $345 and marks them up by 35% of the selling price. The store’s overhead is 20% of the selling price. For its Annual Spring Sale, Poles Apart marks down the price to $425. (12.5 marks)
a. What is the regular selling price?
b. What was the rate of markdown for the sale?
c. What was the profit or loss on each snowboard at the sale price?
d. At the sale price what is the rate of markup on cost?
e. What rate of markdown will price the snowboards at cost?
MATH1033 Assignment 3 (10%) Mathematics of Merchandising and Cost Value Profit 1. Poles Apart purchased snowboards at a cost of $345 and marks them up by 35% of the selling price. The store’s overhead is 20% of the selling price. For its Annual Spring Sale, Poles Apart marks down the price to $425. (12.5 marks) a. What is the regular selling price? b. What was the rate of markdown for the sale? c. What was the profit or loss on each snowboard at the sale price? d. At the sale price what is the rate of markup on cost? e. What rate of markdown will price the snowboards at cost? 2. John Smith, an appliance dealer, can buy a big-screen TV at a list price of $6,400 with a 25%, 10%, 10% series discount. (20 marks) a. Find the net price by calculating the price after each discount. b. Determine the equivalent single discount rate. 3. An invoice for $75.20 has terms of 3/10, 1/30, n/60. If you make payment 25 days after the invoice date, what amount should you pay? (10 marks) 4. In its budget for next month, McGwire Company has revenues of $500,000, variable costs of $350,000, and fixed costs of $135,000. (30 marks) a. Compute contribution margin percentage. b. Compute total revenues needed to break even. c. Compute total revenues needed to achieve a target operating income of $45,000. 5. Whirlpool Corporation had annual sales of $18.907 billion with a net income of $0.549 billion. Total variable costs amounted to $16.383 billion. (20 marks) a. Determine Whirlpool Corporation's break-even in dollars. b. If Whirlpool Corporation managed to increase revenues by 5% the following year while implementing cost-cutting measures that trimmed variable costs by 2%, determine the percent change in the break-even dollars 6. What is the unit contribution margin on a product line that has fixed costs of $1,800,000 with a break-even point of 360,000 units? (2.5 marks) 7. A company’s contribution margin per unit is $25. If the company increases its activity level from 200 units to 350 units, how much will its total contribution margin increase? (5 marks) a. $1,250 b. $3,750 c. $5,000 d. $8,750