Just Desserts buys cheesecakes from General Bakeries at $26.80 per cheesecake. It then cuts each cheesecake into 16 slices and sells them to customers at $5.90 per slice. Calculate the rate of markup on cost and the rate of markup on selling price. (Do not round intermediate calculations and round your final answers to 1 decimal place.)
Question
Just Desserts buys cheesecakes from General Bakeries at 5.90 per slice. Calculate the rate of markup on cost and the rate of markup on selling price. (Do not round intermediate calculations and round your final answers to 1 decimal place.)
Solution
Sure, let's break this down:
Step 1: Calculate the total selling price of the cheesecake Since Just Desserts sells each slice at 5.90 * 16 = $94.40.
Step 2: Calculate the markup The markup is the difference between the selling price and the cost price. So, the markup would be 26.80 (cost price) = $67.60.
Step 3: Calculate the rate of markup on cost The rate of markup on cost is the markup divided by the cost price. So, the rate of markup on cost would be 26.80 (cost price) * 100 = 252.2%.
Step 4: Calculate the rate of markup on selling price The rate of markup on selling price is the markup divided by the selling price. So, the rate of markup on selling price would be 94.40 (selling price) * 100 = 71.6%.
So, the rate of markup on cost is 252.2% and the rate of markup on selling price is 71.6%.
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