Ron and Dee own a floor tile retail outlet. They want to achieve a 40% markup at retail for all of the merchandise that they sell. If one style of floor tile retails at $3 per tile, what is the maximum that Ron and Dee can pay for the tile?
A. $2.06
B. $2.10
C. $2.14
D. $2.22
E. Cannot be determined from the information given
Answer: (C) is the correct answer. In order to calculate the maximum cost, use the following formula: Cost + Markup = Retail Sales Price.
x + (.40)x = 3
1.4x = 3
x = 2.14
The maximum Ron and Dee can pay per tile is $2.14. Thus, answers (A), (B), and (D) are incorrect. (E) is incorrect because the answer can be determined based on the information provided.