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October 5th, 2016, 09:09 PM  #1 
Newbie Joined: Oct 2016 From: canada Posts: 1 Thanks: 0  Please Help with Cost,Volumn,Profit and Trade Discount
Hello everyone, I have tried to solve the questions below, but I'm not sure if they are correct. Please help. Thank you.  1/ The Scarlet Letter bookstore has \$85 000 of sales, variable costs of \$36 550, and fixed costs of \$27 360. What would its sales have to be to break even? Variable cost/total revenue 36550/85000 = 0.43 1.00X = 27360 + 0.43X X=48000 2/ Rover's Friends provides dog washing services. For each dog, supplies cost \$3 and wages are \$5. To provide this service, a special room and equipment are needed, at a cost of \$300 per month. Rover's Friends maintains an average of 30 dogs washed each month. What must Rover's Friends charge as a price for the dog washing service to break even? Variable cost = 3 + 5 = 8, fixed cost = 300. (SP*30) = 30 + (8*30) 30SP=540 SP=18 3/ The Peel Trading Company received an invoice dated September 20 for \$16000 less 25% and 20%, terms 5/10, 2/30, n/60. Peel made a payment on September 30 to reduce the debt to \$5000 and a payment on October 20 to reduce the debt by \$3000. (a) What amount must Peel remit to pay the balance of the debt at the end of the credit period? (b) What is the total amount paid by Peel? (a) 16000(10.25)(10.20) = 9600 (b) 96005000 = 4600 4600(10.05) = 4370 paid 96004600=5000 balance 50003000= 2000 balance 3000(10.02)= 2940 paid The total amount paid by Peel was 4370 + 2940 = 7310 4/ Using a markup of 35% of cost, a store priced a book at \$8.91. (a) What was the cost of the book? (b) What is the markup as a percent of selling price? (a) Selling price = cost + markup, cost = C 8.91 = C + 0.35C 8.91 = 1.35C C=6.6 (b) 6.6(0.35) = 2.31 2.31/8.91 = 25.9% Last edited by skipjack; October 6th, 2016 at 02:06 AM. 
October 6th, 2016, 02:30 AM  #2 
Global Moderator Joined: Dec 2006 Posts: 16,592 Thanks: 1199 
(1) You should state your assumption that variable costs are a fixed percentage of sales. I would write 1.00X = \$27360 + 0.43X (where X is sales amount needed to break even), so X = \$48000. (2) As above, I would suggest putting in the dollar symbols where appropriate. You have a typing error: "(SP*30) = 30 + (8*30)" should be "(SP*30) = 300 + (8*30)". (4) I would suggest writing \$6.60, and stating that your final answer of 25.9% has been rounded to 3 significant figures. 

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cost, discount, profit, trade, volumn 
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