Judy and Dale want to calculate the selling price (on COST) of an item that has a cost of $10.00 and a markup percent on cost of 40%. What is their selling price?

Judy and Dale want to calculate the selling price (on COST) of an item that has a cost of $10.00 and a markup percent on cost of 40%. What is their selling price?


A. $16.67

B. $10.00

C. $10.50

D. $12.00

E. $14.00


Answer: (E) The key to remember is that this calculation is being performed on COST, not retail price. (A), $16.67, is incorrect; this would be the answer if the question had asked for a 40% markup on retail price. (B) cannot be correct because it is at cost. (C) is not correct because Selling Price = Cost + Markup. So SP = $10.00 = .4($10), or $14.00. (D) is also an incorrect answer.


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