# Thread: Comprehensive applications ( markdown .. . i think )

1. ## Comprehensive applications ( markdown .. . i think )

Sonic Boom obtained a stereo system for \$2400 less 30% and 15%. The store’s pricing is based on overhead expenses of 40% of cost. The “regular price” of the stereo system is set so that, if it is sold in a “20% off” sale, the store’s operating profit will be 25% of cost.

a) what is the “regular price”
b) In a midnight Madness Special, the system was sold at a 1/3 off special price.
What was the profit or loss at the special price?

2400(1- 0.30)(1- 0.15) = 1428

S = S ( reduced ) + D

S = 1428 + 0.20s + 0.25s

S – 0.45s = 1428

55s = 1428

S = 2596.36

WRONG

2945.25
where did i go wrong ?

2. Hello,

Cost price; $2400\cdot 0.7 \cdot 0.85=\1428$
The overhead expense is 40% of this;
$=.4*1428=\571.2$

Operating profit is equal to 25% of cost, which is $0.25*1428=\357$
So if it were to be sold at a "20% off" sale, the sale price would be equal to the cost, plus the inbuilt overhead expense, plus the profit;
$\1428+\571.2+\357=\2356.2$
So the regular price is $\frac{\2356.2}{0.8}=\2945.25$

Hope that helps..