Bill's Hardware Marks Up Snow Blowers $130 and Sells Them

question 12

Short Answer

Bill's Hardware marks up snow blowers $130 and sells them for $485. Markup is on cost. What are the cost and percent markup to the nearest hundredth percent?

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Definitions:

Operating Income

The revenue accrued from a firm's foundational business activities, prior to the removal of interest and tax charges.

Fixed Costs

Expenses that do not vary with production volume, such as rent, salaries, and insurance premiums.

Zero Profit

A situation where a business's revenues exactly match its expenses, resulting in no net profit.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit contributes to covering fixed costs.