The Widget Company sells 1,000 widgets annually at a price of $35 each. If the company's pricing policies adhere to a 40% markup of selling price, the cost of each widget is
A) $14.
B) $21.
C) $28.
D) $32.

Question

Quizplus · Accepted Answer

Using the 40% markup on selling price formula, we have:
selling price = cost + 0.4(selling price)
0.6(selling price) = cost
selling price = 35
0.6(35) = cost
cost = $21

The Widget Company Sells 1,000 Widgets Annually at a Price