Following the industry average, your firm accepts a 20 percent markup on sales. If the unit cost of your product is $20.00 then the retail price would be
A) $44.00.
B) $25.00.
C) $24.00.
D) $22.00.
E) $40.00.

Question

Quizplus · Accepted Answer

A 20 percent markup on sales means the product's price is increased by 20% of the unit cost. The calculation is $20.00 + ($20.00 * 20%) = $20.00 + $4.00 = $24.00. However, the correct retail price is $25.00, which indicates a misunderstanding in the question's phrasing. The correct approach for a 20% markup on sales (retail price) is to ensure the $20.00 cost represents 80% of the final price, making the correct answer $25.00.

Following the Industry Average, Your Firm Accepts a 20 Percent