If the unit cost is $25 and the desired return on sales is 60% then the markup price is _________?
Correct answer: A. $62.50
- A. $62.50
- B. $65.50
- C. $69.50
- D. $75.50
Explanation
When the desired return on sales is 60%, the markup price is calculated as unit cost divided by one minus the return: $25 ÷ (1 − 0.60) = $62.50. This is different from simply adding 60% to cost, because the return is measured as a share of sales price.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Marketing
Marketing covers how organisations identify customer needs, create value and exchange products or services through suitable markets. Key concepts include market segmentation, targeting, positioning, consumer behaviour, the marketing mix of product, price, place and promotion, branding, product life cycle and differences between marketing and selling.
Practise Marketing
1,700 free Marketing MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Marketing questions
Considering auction-type pricing, the techniques are involved like ___________?
The price discrimination in which seller charges different prices to different customers on the basis of their demand is classified as __________?
The type of trading in which buyers and sellers exchange goods in place of payments is classified as _______?
The desired return is subtracted from 1 and is divided by unit cost to calculate __________?
The fixed cost is divided by unit sales and then added into variable cost for calculation is ___________?
The pricing technique through sellers charge constant low prices without any sales promotion effort is classified as ________?