Workwear Station uses a markup on cost of 60% to establish it's retail prices. This pricing rule builds in a profit of 25% of cost. What rate of markdown can Workwear Station offer and just break even on the reduced price ?

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- February 11th 2009, 09:27 AMdiehardmath4[SOLVED] business math
Workwear Station uses a markup on cost of 60% to establish it's retail prices. This pricing rule builds in a profit of 25% of cost. What rate of markdown can Workwear Station offer and just break even on the reduced price ?

- February 11th 2009, 10:02 AMHallsofIvy
If the cost is C, then the markup is .6C and so the retail price is 1.6C. I assume that there are additional cost (store rental, salaries, etc.) so that minus .25C, which is (1.6- .25)C= 1.35C, is equal to the Total cost. Now the problem asks for a markdown, m, so that m(1.6C)= 1.35C. That is, of course, m= 1.35/1.6., written as a percent.