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Difficulty: MediumProfit and Loss

An electronics refurbisher buys a lot of 55 broken laptops for $300\$300. The refurbisher spends an additional $150\$150 on replacement parts and $50\$50 on shipping. If the refurbisher wants to make a 40%40\% profit on the total investment, what must be the average selling price of each laptop?

  1. A
    $84\$84
  2. B
    $124\$124
  3. $140\$140Answer
  4. D
    $700\$700

Answer

The correct selling price is $140\$140 per laptop.
The total investment is the sum of all costs: $300\$300 for the broken laptops, $150\$150 for replacement parts, and $50\$50 for shipping, which equals a total of $500\$500. To make a 40%40\% profit on the investment, the refurbisher needs to generate 140%140\% of the total cost in revenue (1.40×$500=$7001.40 \times \$500 = \$700). Dividing the $700\$700 total target revenue by the 55 laptops gives an average selling price of $140\$140 per laptop.

Step-by-Step Solution

1
Calculate the total cost (investment).
$300+$150+$50=$500\$300 + \$150 + \$50 = \$500
To find the total amount invested before calculating the desired profit.
2
Calculate the total revenue needed for a 40%40\% profit.
$500×1.40=$700\$500 \times 1.40 = \$700
To determine the total amount of money required to cover all costs and achieve the 40% profit margin.
3
Calculate the average selling price per laptop.
$700÷5=$140\$700 \div 5 = \$140
To distribute the total required revenue evenly across the 5 laptops.

Key Concept

Calculating net profit by determining total investment, applying a percentage markup, and finding unit price.
Estimated Time:1m 15s
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Topics

Profit and Loss

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