A retail store buys 175 VCRs from a distributor at a cost of $235 each plus an overhead charge of $45 per order. The retail markup is 40% on the total price paid. Find the profit on the sale of one VCR.
A) $94.10
B) $94.00
C) $93.90
D) $9410.00

Question

Quizplus · Accepted Answer

The cost per VCR is $235. The overhead charge does not depend on the number of VCRs, so it's not included in the cost per VCR. The total cost for one VCR is $235. The retail markup on the total price paid is 40%, so the selling price per VCR is $235 * 1.40 = $329. The profit on one VCR is the selling price minus the cost price, which is $329 - $235 = $94. However, considering the precision in the options, the calculation should include the overhead charge distributed per VCR, which is $45/175 = $0.2571. Adding this to the cost gives a slightly adjusted cost per VCR of $235.2571. The selling price becomes $235.2571 * 1.40 = $329.36 (approximately). The profit is thus $329.36 - $235.2571 = $94.10 (approximately), which matches closest to option A.

A Retail Store Buys 175 VCRs from a Distributor at a Cost