Thread: [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 ?

Originally Posted by diehardmath4

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 ?

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.