suppose a bakery makes 200 cherry cheesecakes at a cost of $2.65 each. if a spoilage rate of 5% is…

suppose a bakery makes 200 cherry cheesecakes at a cost of $2.65 each. if a spoilage rate of 5% is anticipated, at what price (in $) should the cakes be sold to achieve a 40% markup based on cost? (round your answer to the nearest cent.)

suppose a bakery makes 200 cherry cheesecakes at a cost of $2.65 each. if a spoilage rate of 5% is anticipated, at what price (in $) should the cakes be sold to achieve a 40% markup based on cost? (round your answer to the nearest cent.)

Answer

Explanation:

Step1: Calculate the number of non - spoiled cheesecakes

The bakery makes 200 cheesecakes and has a 5% spoilage rate. The number of non - spoiled cheesecakes is $200\times(1 - 0.05)=200\times0.95 = 190$.

Step2: Calculate the total cost

The cost of making 200 cheesecakes at $2.65$ each is $C = 200\times2.65=530$ dollars.

Step3: Calculate the total revenue needed for a 40% markup

The cost is $C = 530$ dollars. A 40% markup on cost means the total revenue $R$ should be $R=(1 + 0.4)\times530=1.4\times530 = 742$ dollars.

Step4: Calculate the selling price per non - spoiled cheesecake

The total revenue is $R = 742$ dollars and the number of non - spoiled cheesecakes is 190. The selling price per cheesecake $P$ is $P=\frac{742}{190}=3.9$ dollars.

Answer:

$3.90$