A Local Dunkin' Donuts Makes Blueberry Muffins That Cost

question 116

Multiple Choice

A local Dunkin' Donuts makes blueberry muffins that cost $.69 each. Past experience shows that 15% of the muffins will spoil and have to be discarded. Assuming that this 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

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Definitions:

Inventory Purchase Price

The cost incurred to acquire goods or materials held for sale or production in the business.

Outstanding Voting

Shares of a company that are currently owned by investors and have the right to vote on corporate matters.

Outstanding Voting

Refers to the shares of a corporation that have voting rights and are currently held by shareholders, not the company itself.

Initial Value Method

An accounting approach where investments are recorded at their original cost without subsequent adjustment for changes in value.