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Math OER
 Turn In Problems 
 Business Decisions — Margin, Markup, and Pricing 

The greatest reward for a student is not a good grade. It is the willingness of his teacher to listen to him.

- Nikolay Konstantinov

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1. Gavin's tool emporium uses a 40% margin rate. Its most popular item has a $240 selling price. What is the margin amount?

$96 $144 $171.43 $336

2. Grace works at a store that uses a 40% markup rate. She orders an item for $90 wholesale cost. What is the markup amount?

$36 $54 $64.29 $126

3. Georgina's Vitamin Shop uses a 75% margin rate. It needs to stock a certain bottle of vitamins with a selling price of no more than $3.50. How much can the shop allow a supplier to charge for this bottle of vitamins?

$0.61 $0.88 $2.00 $2.63

4. Geoffrey works at a store that uses a 30% markup rate. The wholesale cost of an certain item is at minimum $22. The store's competitors sell an equivalent item for $30. Will Geoffrey's store undercut the competition if they stock this item?

yes, by $1.40 no, by $1.43
yes, by $13.07 no, by $6.60

5. Galina has a clock that cost her $62.50. She wants to sell it online for $102.50, for a profit of $40. What is the margin rate? What is the markup rate?

margin rate 39% markup rate 25%
margin rate 64% markup rate 39%

6. Grafton works at a sporting goods store, and knows that a certain kind of skis will only sell if it is priced $109.95 or less. The wholesale cost is $80. What is the markup rate?

24% 27% 33% 37%

7. A fancy new infant car seat has a skim price of $220 initially, but the sale price eventually settles at the penetration price of $150. The wholesale cost is $67. Divide the larger margin by the smaller margin to find the percentage of extra margin from skimming.

47% more margin 54% more margin
68% more margin 84% more margin

8. A restaurant meal that serves six has $50 food cost, $70 labor cost, and $25 other cost. Find the price per plate using to the desired profit method with a 10% desired profit, and then with the food cost percentage method with a 30% scale factor.

$14.50 with desired profit method $10.83 with food cost method
$26.58 with desired profit method $15.00 with food cost method

9. The manager of a furniture store knows that a certain table will only sell if the sale price $250 or less. Currently the sale price is $275. What percent discount is needed?

9% 10% 90% 110%

10. Giselle works at a candy store. She knows from past years' experience that after Valentine's Day she needs to reduce the prices of the special $30 chocolate boxes down to $18 to clear out that inventory. She uses a store-wide sale of 10%, hoping that will attract customers. She also distributes a coupon that further discounts the sale price of just those expensive chocolate boxes. What percent discount is needed on the coupon?

33% 40% 60% 67%