Question

MATHEMATICS OF BUSINESS AND FINANCE

(A) Company A and Company B sell the same model camera for $105 and $135, respectively. During a sale, Company A offers a discount of 10% on the camera. What should Company B's rate of markdown be on the camera to match Company A's sale price?

(B) A dealer purchased machinery for $64,500.00 per unit. His overhead expenses are 30.00% of the cost and he desires an operating profit of 35.00% of the cost. During a sale, he offers a markdown of 30.00%.

a. Calculate the reduced selling price per unit. (Round to the nearest cent)

b. Calculate the break-even price. (Round to the nearest cent)

c. Calculate the profit or loss made per unit at the reduced selling price. Round your answer to two decimal places. Use a negative sign to represent a loss

Answer 1

A.

	Company A	Company B
Selling Price	$105	$135
Discount	10.5	$40
Reduced Selling Price	$95	$95
Rate of Markdown by company B to match the selling price with company A
Discount that Company B have to allow = Company B selling Price- Company A Reduced Selling Price
Discount that Company B have to allow = $135-$95
Discount that Company B have to allow	=	$40
Percentage	=	29.63%

B.

Machinery	64500	64500
Overhead	30%	27642.85
Operating Profit	35%	32250.05
a. Reduced Selling Price per unit= Machinery Cost+Overhead+Operating Profit-Sales Discount
=(64500+27642.85+32250.05)*.7
87075.03
b. Break even Price
Break even Price = Machinery Cost+Overhead
=64500+27642.85
92142.85
c. Net Profit/Loss:
Sales Price	$124,392.90
Less Discount	$37,317.87
Discounted sales price	$87,075.03
Less Total Cost	$92,142.85
Loss	-$5,067.82