Retailer selling price of a printer is $600 Retailer markup on selling price = 25% Wholesaler...

Question:

Retailer selling price of a printer is $600

Retailer markup on selling price = 25%

Wholesaler markup on selling price = 20%

Manufacturer's cost is $200

What was the cost to the wholesaler?

What Is A Markup:

In the retail environment where there are multiple layers to distribution channels, it is common for companies to establish their price as a Markup on the selling price. This Markup reflects the portion of the selling price that is gross profit.

Answer and Explanation:

Wholesaler selling price = Retailer cost

Retailer cost = Selling price - Selling price *0.25

=600 - 600*0.25

=$450

Wholesaler selling price = $450

Wholesaler cost = Selling price - Selling price *0.20

=450- 450*0.20

=$360

The wholesaler cost is thus $360.


Learn more about this topic:

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How to Calculate Markup: Definition & Formula

from Principles of Marketing: Help and Review

Chapter 12 / Lesson 22
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