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Managerial accounting: markup, discounts, selling price,cost

1.Markup is:

a.selling price + cost
b.selling price divided by cost
c.selling price cost
d.selling price (1 + cost)
e.None of these

2.Black and Decker Manufacturing sold a set of saws to True Value Hardware. The list price was $3,800. Black and Decker offered a chain discount of 8/3/1. The net price of the saws is_________.

a.$3,537.12
b.$3,537.21
c.$3,391.12
d.$3,357.21
e.None of these

3.A local Dunkin Donuts makes blueberry muffins that cost $0.69 each. Past experience shows that 15% of the muffins will spoil and have to be discarded. Assuming this donut shop wants a 30% markup based on cost and produces 200 muffins, each muffin should sell for______.

a.$0.90
b.$0.91
c.$1.50
d.$1.06
e.None of these

4.Zales bought a tea set for $1,400. Zales wants to markup the set 55% of the selling price. The selling price of the tea set should be_________

a.$2,030.00
b.$2,300.00
c.$3,111.11
d.$3,111.10
e.None of these

5.A local college bookstore paid a net price of $12,500 for textbooks for the coming semester. The publisher offered a trade discount of 20%. The publisher's original list price was:

a.$15,000
b.$15,500
c.$15,625
e.$2,500
d.None of these

6.Amount of trade discount is represented by the ____________.

a.base
b.rate
c.portion
d.base divided by rate
e.None of these

7. J.C. Penney of Boston sold office equipment for $12,000 to Lee's of San Diego. Terms of the sale are 3/10, n/30 F.O.B. Boston. J.C. Penney has agreed to prepay freight $300. Assuming Lee pays within the discount period, how much will they pay J.C. Penney?

a.$11,640.00
b.$8,544.00
c.$8,644.00
d.$11,940.00
e.None of these

8.(1 + markup percent on cost) X cost equals_______________.

a.cost at wholesale
b.cost at retail
c.selling price
d.markup
e.None of these

9. Mr. Small, store manager for Jay's Appliance, is having a difficult time placing a selling price on a refrigerator that cost $410. Mr. Small knows his boss would like to have a 45 percent markup based on cost. The selling price should be_________.

a.$745.45
b.$754.54
c.$594.50
d.$549.50
e.None of these

10. Gap sells jeans that cost $21.00 for a selling price of $29.95. The percent of markup based on cost is_______.

a.42.62%
b.46.26%
c.29.88%
d.28.9%
e.None of these

Solution Summary

The solution answers Managerial accounting questions related to markup, discounts, selling price,cost.

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