Question

Costco can purchase a bag of Starbucks coffee for $24.00 less discounts of 20%, 15%, and 7%. It then adds a 40% markup on cost. Expenses are known to be 25% of the regular unit selling price.

a. What is the cost of the coffee?

b. What is the regular unit selling price?

c. How much profit will Costco make on a bag of Starbucks coffee?

d. What markup on selling price percentage does this represent?

Answer 1

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Costco co.
Answer a	Amount $	Note
Lis price	24.00	A
Less: Discount at 20%	4.80	B=A*20%
Balance	19.20	C=A-B
Less: Discount at 15%	2.88	D=C*15%
Balance	16.32	E=C-D
Less: Discount at 7%	1.14	F=E*7%
Cost of the coffee	15.18	G=E-F
Answer b	Amount $
Cost of the coffee	15.18	See G
Add: Markup at 40%	6.07	H=G*40%
Regular unit selling price	21.25	I=G+H
Answer c	Amount $
Regular unit selling price	21.25	See I
Less: Cost of the coffee	15.18	See G
Less: Expenses at 25%	5.31	J=I*25%
Profit per bag	0.76	K=I-G-J
Answer d	Amount $
Regular unit selling price	21.25	See I
Profit per bag	0.76	See K
Markup on selling price percentage	3.57%	L=K/I