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The selling price of a refrigerator, is $644.40. If the markup is 20% of the dealer's cost, what...

Question:

The selling price of a refrigerator, is $644.40.

If the markup is 20% of the dealer's cost, what is the dealer's cost of the refrigerator?

Markup:

Markup is the amount of money that is added to the original cost or price of a good or service in order to cover the operational cost of the business and make a profit.

Answer and Explanation:


Let the dealer's cost be {eq}X {/eq}. If the markup is 20% of the dealer's cost and the selling cost is $644.40, then:

  • {eq}644.40 = \dfrac{120}{100}X {/eq}
  • {eq}X = \dfrac{100\times 644.40}{120} = \boxed{\$537} {/eq}

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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