a department store purchases logo shirts at a cost of $10 per shirt. they mark up the price 100% and put…

a department store purchases logo shirts at a cost of $10 per shirt. they mark up the price 100% and put them on the sales floor. every month that a shirt doesnt sell, the store reduces the selling price by 25%. after three monthly markdowns, the final shirt from the shipment is sold. there is a 5% sales tax on the selling price. what is the total cost to the customer?

a department store purchases logo shirts at a cost of $10 per shirt. they mark up the price 100% and put them on the sales floor. every month that a shirt doesnt sell, the store reduces the selling price by 25%. after three monthly markdowns, the final shirt from the shipment is sold. there is a 5% sales tax on the selling price. what is the total cost to the customer?

Answer

Explanation:

Step1: Calculate the initial marked - up price

The cost per shirt is $10. A 100% markup means the selling price before markdowns is $10\times(1 + 100%)=10\times2 = 20$.

Step2: Calculate the price after the first markdown

The store reduces the price by 25% each month. After the first markdown, the price is $20\times(1 - 25%)=20\times0.75 = 15$.

Step3: Calculate the price after the second markdown

After the second markdown, the price is $15\times(1 - 25%)=15\times0.75 = 11.25$.

Step4: Calculate the price after the third markdown

After the third markdown, the price is $11.25\times(1 - 25%)=11.25\times0.75 = 8.4375$.

Step5: Calculate the total cost with sales tax

The sales tax is 5%. So the total cost to the customer is $8.4375\times(1 + 5%)=8.4375\times1.05=8.859375\approx8.86$.

Answer:

$8.86$