What is the selling price of the new model skateboard purchased by the sports shop owner?
The selling price of the skateboard, considering a markup of 18%, is approximately $80.24.
Understanding the Markup Calculation
Mark-up Percentage and Selling Price: In this scenario, the sports shop owner purchased a new model skateboard for $68 from the maker. The mark-up percentage applied by the store is 18%. This mark-up percentage represents the increase in the selling price from the cost price.
Calculating the Mark-up Increment: To determine the selling price of the skateboard, we need to calculate the mark-up increment. This is done by multiplying the cost price ($68) with the mark-up rate (0.18). The result of this calculation is $12.24, which signifies the increase in price due to the mark-up.
Deriving the Selling Price: The final selling price of the skateboard is obtained by adding the increment amount to the cost price. Therefore, the selling price would be $68 + $12.24 = $80.24. This means that the sports shop owner would sell the new model skateboard at approximately $80.24 to cover the cost and mark-up percentage.
Conclusion: By applying an 18% mark-up on the cost price of $68, the sports shop owner is able to set the selling price of the new model skateboard at $80.24. Understanding mark-up calculations is crucial for businesses to determine profitable pricing strategies. For further information and examples on percentage calculations, you can refer to reliable sources such as educational websites or mathematical tutorials.