Marketing Essentials

Unit 8: Pricing

Math Workout

1
Your boss has asked you to determine the difference in the rate of return on investment between two products because she is considering discontinuing one. One product costs $23.34 to produce and market and is sold for $67.95. The other product costs $34.76 to produce and market and is sold for $83.99. How much higher is the rate of return on investment for the first product?
A)10%
B)7%
C)18%
D)14%
2
You have decided that in order to out compete a store down the street you will place the bedspread that you both carry on sale. Your store typically sells 75 bedspreads a month, and the other store sells about 80, but you plan to increase your sales by 20% and take those sales away from the competition. The other store will continue to make $123.56 on each bedspread, while your revenue per bedspread will now be $108.07. What will be the difference between how much the stores make?
A)$3,089.00
B)$158.50
C)$1,694.90
D)$2,701.75
3
You have decided to make paper towels a loss leader next week in order to draw customers into your grocery store. Your store purchases the 12 packs of towel rolls for $6.99 but you’re going to sell them $4.59. If you expect to sell 160 packages of towels, how much will the store lose in profit on the sale of paper towels?
A)$1,118.40
B)$384.00
C)$734.40
D)$192.00
4
A wholesaler has sold 3,476 dolls to various retail stores. The dolls were bought from the manufacturer for $52,939.48 and sold to retailers for $78,522.84. How much of a markup did the wholesaler put on each doll?
A)$15.23
B)$1.48
C)$22.59
D)$7.36
5
The marketing director for a technology company is trying to decide whether to use skimming pricing or penetration pricing for a new product the company has developed. He predicts that using skimming pricing and setting the price at $759.98 will result in sales to about 500 buyers. If he uses penetration pricing, setting the price at half of the skimming price, however, the market would probably be 130% larger. How much more could the company make with the penetration pricing?
A)$189,995.00
B)$132,996.50
C)$56,998.50
D)$113,997.00
6
A manufacturer quotes the following discounts in series: 25 and 12 percent for retailers and wholesalers respectively. If the list price is $78, what will the difference in cost to the retailer and the wholesaler be for 35 items?
A)$245.70
B)$1,801.80
C)$3,849.30
D)$354.90
7
You have decided that it is time to purchase new delivery trucks for your business. You have chosen the new trucks and will buy them from the manufacturer. The trucks will cost $33,495 each and you will receive a 25% discount on that price for each old truck you trade in. If you plan on buying fifteen trucks and trading in nine, how much will you end up spending on the new trucks?
A)$452,182.50
B)$276,333.75
C)$376,818.75
D)$427,061.25
8
The cost to Pet Place is $54.78 for the dog beds it retails for $98.50. What is the percent markup based on retail price and the percent markup based on cost price for this item?
A)180% and 56% respectively
B)44% and 80% respectively
C)225% and 125% respectively
D)80% and 44% respectively
9
Your retail garden store buys 500 petunias at $1.49 each from the wholesaler. You plan to sell 75% of the flowers to customers for the full retail price of $2.65. Ten percent will be sold to employees at a 20% markdown, and the final 15% will be sold on sale for 25% off at the end of the season. In the end, how much will the store make in net profits?
A)$339.44
B)$745.00
C)$504.00
D)$1,249.00
10
A manufacturer has provided your business with the following table for quantity discounts. How much more would your business pay for 1,230 items than 870?
Number of items1-500500-10001000-1500
Unit price$8.25$7.65$6.90
A)$2,754.00
B)$1,831.50
C)$3,406.50
D)$2484.00
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