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A furniture supplier lists a dining room set for $1,800 and offers trade discounts of 25%,...

A furniture supplier lists a dining room set for $1,800 and offers trade discounts of 25%, and 10% to its retailers. The retailer's overhead expenses are 29% of cost and operating profit is 22% of the cost. After three months, the price is reduced to $1,614. What is the rate of markdown at the sale price? Your answer should be accurate to two decimal places. Markdown =$ What is the break-even price of the set? For full marks your answer(s) should be rounded to the nearest cent .Break-even price =

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Expert Solution

Before 3 month After 3 month

List Price 1800 1614

Less: Trade Discount (25%) 450 403.5

Price after Trade Discount 1350 1210.5

Less: Retailer Discount (10%) 135 121.05

A)Cost Price 1215 1089.45

B) Overhead expenses (29 % of Cost) 1215 * 29% 1089.45*29%

352.35 315.94

C) Operating Profit (22% of cost) 1215 * 22 % 1089.45*22%

267.3 239.68

Sale price of retailer (A+B+C) 1834.65 1645.07

Break-even point of set 1567.35 1405.39

Markdown in the sale price after 3 months = $ 189.58

jeff jeffy answered 2 years ago
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