Problem 37 - College Algebra Essentials

Question

Involve markup, the amount added to the dealer's cost of an item to arrive at the selling price of that item. The selling price of a refrigerator is \(\$ 584 .\) If the markup is \(25 \%\) of the dealer's cost, what is the dealer's cost of the refrigerator?

Step-by-Step Solution

Answer

The dealer's cost for the refrigerator is $467.2

Step 1: Understanding the concept of markup

The markup is the amount added to the cost of a product to determine the selling price. Here, it's given that the markup is 25% of the dealer's cost. So, let dealer's cost be \(x\). Therefore, markup = \(0.25x\)

Step 2: Setting up the equation

Given that the selling price of the refrigerator is $584. From the above step, we know the selling price is summation of the cost price and the markup. Therefore, we can set up the equation as follows: \(584 = x + 0.25x\)

Step 3: Solving the equation

Combine like terms to simplify the equation which becomes \(584 = 1.25x\). Divide both sides of the equation by 1.25 to find the dealer's cost. \(x = 584 / 1.25\)

Step 4: Calculate the dealer's cost

Calculating the cost, the dealer's cost of the refrigerator equals \(467.2\)