The MOLE, a toy retailer, wants to calculate the selling price for some of their stuffed dolls. They know that they paid $400 each for the dolls, and they want a 60% markup on selling price. What should their selling price be?
A. $640
B. $350
C. $750
D. $1,000
E. $5,300
Answer: (D) Their selling price should be $1,000. (A) is incorrect because this gives a 60% markup as a percentage of the $400 cost. (B) cannot be correct because $350 is below cost, thus MOLE would be selling at a loss. (C) is incorrect because in order to calculate selling price, the formula to utilize is SP = COST + MARKUP (SP = C + M). Since the cost of $400 + 60%(SP) is not $750, this choice is wrong. (E) is also incorrect because the cost plus 60% of the selling price does not equal $5,300.