What is the selling price ?
James is trying to sell some merchandise on an online store. The online store charges 10 percent commission on every sale transaction. James's cost of procuring the merchandise is 400 dollars. He decides to sell the merchandise at 20 percent profit. What should the List price of the merchandise be set to on the online store so that James makes 20 percent profit when the merchandise is purchased by a customer ?.
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1 solution
Cost before profit = 400
Cost after profit = 480
Let the list price on the online store be dollar "x"
Commission taken by the store is 0.1 * x (10 percent)
Total sales price after commission is 0.9*x
In order for James to get a 20 percent profit after the
10 percent commission charged by the online store
x = 533.33 or the merchandise should be listed at a price of dollar 533.33