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Difficulty: HardCalculating Percentages of Quantities

A military surplus store acquires a bulk shipment of sleeping bags for a total cost of $15,000\$15,000. To determine the regular retail value, the store manager applies a 40%40\% markup to the total cost. Several months later, the store sells the entire shipment at a 15%15\% discount off the regular retail value. What is the final selling price of the shipment?

  1. $17,850\$17,850Answer
  2. B
    $18,750\$18,750
  3. C
    $20,685\$20,685
  4. D
    $20,985\$20,985

Answer

The final selling price of the shipment is $17,850\$17,850.
The final selling price is calculated by first finding the retail value after a 40% markup on the 15,000cost,whichresultsin15,000 cost, which results in 21,000. Then, a 15% discount is applied to the new 21,000base,subtracting21,000 base, subtracting 3,150 to reach the final price of $17,850.

Step-by-Step Solution

1
Calculate the markup amount based on the initial cost.
$15,000×0.40=$6,000\$15,000 \times 0.40 = \$6,000
The regular retail value is established by adding a 40% markup to the original cost.
2
Determine the regular retail value.
$15,000+$6,000=$21,000\$15,000 + \$6,000 = \$21,000
The total retail value serves as the new base amount for any subsequent discounts.
3
Calculate the discount amount during the clearance event.
$21,000×0.15=$3,150\$21,000 \times 0.15 = \$3,150
The 15% discount is applied to the current retail value, not the original cost.
4
Subtract the discount from the retail value to find the final price.
$21,000−$3,150=$17,850\$21,000 - \$3,150 = \$17,850
This yields the final selling price after both the percentage increase and decrease have been sequentially applied.

Key Concept

Successive Percentage Calculations
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Topics

Calculating Percentages of Quantities

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