Arley’s Bakery makes fat-free cookies that cost $1.50 each. Arley expects 15% of the cookies to fall apart and be discarded. Arley wants a 45% markup on cost and produces 200 cookies. What should Arley price each cookie?
Business · Middle School · Mon Jan 18 2021
Answered on
To determine the selling price per cookie, let's break down the cost and apply the desired markup:
Cost per cookie = $1.50
Expected waste = 15% of 200 cookies = 0.15 * 200 = 30 cookies discarded
Actual cookies for sale = Total cookies - Discarded cookies = 200 - 30 = 170 cookies
Now, calculate the total cost for the cookies for sale:
Total cost for 170 cookies = Cost per cookie * Actual cookies for sale = $1.50 * 170
Next, apply the desired markup of 45% on the cost to find the selling price per cookie:
Markup = 45% of the total cost for 170 cookies
Selling price per cookie = Total cost for 170 cookies + Markup
Let's calculate:
Total cost for 170 cookies = $1.50 * 170 = $255
Markup = 45% of $255 = 0.45 * $255
Selling price per cookie = $255 + Markup
Now, compute the selling price per cookie:
Markup = 0.45 * $255 = $114.75
Selling price per cookie = $255 + $114.75
Selling price per cookie= $369.75
Therefore, Arley should price each cookie at $2.18 (rounded to the nearest cent) to achieve a 45% markup on the cost.