Suppose a wholesaler buys new disposable phones from your factory for $30 per phone

1) Suppose a wholesaler buys new disposable phones from your factory for $30 per phone, and wants to make a 30% margin on the selling price. How much must the wholesaler sell each phone?

2)Suppose you are selling new pairs of environmentally friendly shoes through a series of intermediaries. Your suggested retail price is $120 per pair. The retailer requires a 40% margin while the wholesaler requires 25 percent margin.

How much will the retailer pay for the shoes?

How much will the wholesaler pay for the shoes?

Solutions

Expert Solution

Answer.

1. Cost of the phone=$30

Profit margin =30%

Selling price=30/1-30%

=30/.70=42.857

Wholesaler sell each phone at $ 42.857

2. Seller

Wholesaler

Retailer

Retail price =120 (assuming that the final price of the product is 120)

retailers profit =40%

a retailer paying to the wholesaler=120-40%=72

Wholesaler need 25% profit.

b Wholesaler pays =72-25%=54

jeff jeffy answered 2 years ago

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