If cost is $133 and markup on cost is 35%, the selling price is approximately $180.

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Prepare for the AAMI Small Business Management Test with flashcards and multiple choice questions; each question comes with hints and explanations. Get exam ready!

Multiple Choice

If cost is $133 and markup on cost is 35%, the selling price is approximately $180.

Explanation:
The idea here is how to compute selling price when the markup is based on cost. When markup on cost is 35%, the selling price equals the cost times 1.35. So do 133 × 1.35 = 179.55. That’s about 179.55, which rounds to 180. The markup amount is 133 × 0.35 = 46.55, and adding that to the cost gives 179.55. Since the options are whole dollars, the closest is 180. (Note: if the markup were a percentage of selling price, the calculation would be different.)

The idea here is how to compute selling price when the markup is based on cost. When markup on cost is 35%, the selling price equals the cost times 1.35. So do 133 × 1.35 = 179.55. That’s about 179.55, which rounds to 180. The markup amount is 133 × 0.35 = 46.55, and adding that to the cost gives 179.55. Since the options are whole dollars, the closest is 180. (Note: if the markup were a percentage of selling price, the calculation would be different.)

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