The spoilage rate on a shipment of wheat is expected to be 20%. It was purchased at a cost of $5.35 per bushel. What should the selling price per bushel be to achieve a markup of 6% based on selling price? (Round your answer to the nearest cent)
A) $5.67
B) $7.09
C) $5.57
D) $7.11

Question

Quizplus · Accepted Answer

To achieve a 6% markup on the selling price, first calculate the effective cost per bushel considering the spoilage: $5.35 / (1 - 0.20) = $6.6875. Then, set up the equation for selling price: Cost = Selling Price * (1 - Markup), so $6.6875 = Selling Price * (1 - 0.06). Solving for Selling Price gives approximately $7.11.

The Spoilage Rate on a Shipment of Wheat Is Expected