Question

Within a given distribution channel, the following information is available concerning trade margins and costs. A wholesaler has a unit selling price of $783 and a unit cost of $516. The retailer requires a 47% markup on selling price. The manufacturer has unit variable costs of $311. Calculate the manufacturer's percent markup on cost. Report your answer as a percentage and round to the nearest percent.

Answer 1

Answer:- Markup Percentage on cost = (Sales Price – Unit Cost) / Unit Cost

So, manufacturer's sales price will be cost price of wholesaler. So, manufacturer's sales price is $516.

Manufacturer's Markup Percentage on cost = (Sales Price – Unit Cost) / Unit Cost

= ($516 - $311) / $311

= $205 / $311

= 0.6591639871

or

65.92%

or

66% (rounded to nearest percentage)