Selling Price Calculation for Apples

What should the selling price per pound be?

1. 500 pounds of apples were purchased at $0.34 per pound. The desired markup is 35% based on selling price, but 18% spoilage is expected.

A. $0.36

B. $0.52

C. $0.56

D. $0.64

Answer:

The selling price per pound should be $0.56 in order to achieve the desired markup of 35% based on selling price and considering the expected spoilage of 18%.

To calculate the selling price per pound, we need to consider the purchase price, desired markup, and expected spoilage.

Given:

Purchase price per pound: $0.34

Desired markup based on selling price: 35%

Expected spoilage: 18%

1. Calculate the total cost per pound:

Total cost per pound = Purchase price per pound / (1 - Spoilage rate)

Total cost per pound = $0.34 / (1 - 0.18) = $0.34 / 0.82 ≈ $0.4146

2. Calculate the selling price per pound:

Selling price per pound = Total cost per pound * (1 + Markup rate)

Selling price per pound = $0.4146 * (1 + 0.35) ≈ $0.5600

Rounding the selling price per pound to the nearest cent, the answer is:

C. $0.56