Angie’s Bake Shop makes birthday chocolate chip cookies that cost $1.40 each. Angie expects that 10% of the cookies will crack and be discarded. Angie wants a 50% markup on cost and produces 100 cookies.
What should Angie price each cookie?
I'm really confused, everything I do turns out to be wrong. Trying to get a fresh perspective on it, because I just don't get it!
What should Angie price each cookie?
I'm really confused, everything I do turns out to be wrong. Trying to get a fresh perspective on it, because I just don't get it!
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1.4(100)
140
100(.1)=10; 100-10=90
140(1.5)=210
210/90=$2.33/ea
140
100(.1)=10; 100-10=90
140(1.5)=210
210/90=$2.33/ea
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Not true. $2.33 * 90 = $209.70. $209.70 / $140 = 1.49786, which is a 49.786% markup, not a 50% markup. Though $2.33 is the closest penny to the exact answer, $2.34 results in a markup of 50% or more and $2.33 does not. I explained this in my (better) explanation of the problem and solution.
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If they cost $1.40 each, then it costs $140.00 to make 100 of them.
But 10% (one in every ten) crack and get discarded, so it actually costs $140.00 to make 90 cookies that can be sold.
The materials cost her $140.00, so a 50% markup requires a revenue of $140 * 1.5, which is $210.
Angie has 90 cookies that can be sold, and she needs to make $210.
So the price of each cookie is $210 / 90, which is $2.33333...
Rounding to the nearest penny, she would have to sell each cookie for $2.33. However, because it was rounded down, she actually won't quite make a 50% markup, though it will be very close.
If she wants to ensure that she makes at least a 50% markup, she needs to sell them for $2.34 each.
But 10% (one in every ten) crack and get discarded, so it actually costs $140.00 to make 90 cookies that can be sold.
The materials cost her $140.00, so a 50% markup requires a revenue of $140 * 1.5, which is $210.
Angie has 90 cookies that can be sold, and she needs to make $210.
So the price of each cookie is $210 / 90, which is $2.33333...
Rounding to the nearest penny, she would have to sell each cookie for $2.33. However, because it was rounded down, she actually won't quite make a 50% markup, though it will be very close.
If she wants to ensure that she makes at least a 50% markup, she needs to sell them for $2.34 each.
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The 10% of cookies discarded will be part of costs. If she factors that into the regular costs of $1.40, then she will add another $0.14 to those cost, bringing up the total cost of each cookie to $1.54. A 50% mark up on each cookie would then be half that amount, which would be $0.77. Add that to the $1.54 to get a total selling price of $2.31 per cookie.
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I am confused as to whether you mean 50% mark up from the ideal price of one hundred cookies or a 50% mark up from the 90% that exist after the breakings. :/