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A firm charges $14 for a product. If the markup is 40%, then the fully allocated average cost is :?

 a. $19.60 

 b. $10.00 

 c. $8.40 

 d. None of the above is correct.

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Question added by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company
Date Posted: 2015/07/23
Duncan Robertson
by Duncan Robertson , Strategy Consultant , Duncan Robertson Consultancy

Well everybody has correctly answered  b) $10, but nobody has shown their working clearly.  There's no point in posting and answering these plagiarised questions without explaining WHY the answer is what it is.

 

Retail price = $14

Markup =40% =0.4

Retail price = Cost * (1+Markup)

=>14 = Cost *1.4

=> Cost =14/1.4 = $10

Khaled Anwar
by Khaled Anwar , Senior Sales Engineer , "Automotive company''

The answer is : Option ( b ) 

Emad Mohammed said abdalla
by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company

  1. The correct answer was: b. $10.00

Sashikanta Mohapatra
by Sashikanta Mohapatra , Manager - Business Development/Sales Process Deployment , Vodafone Spacetel Limited

It's the2nd option....Option B.

Ahmed Mohamed Ayesh Sarkhi
by Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

My Answer Is Option " B " .....

 

Ramesh Sehgal
by Ramesh Sehgal , Chief Financial Officer , How United Services WLL

Presume cost is =100

Mark-up40%=40

Total selling price should be =140

In this case selling price is =14

So cost to be =14 x100/140

=10

khaled elkholy
by khaled elkholy , HR MANAGER , misk for import & export

b. is correct answer...............................................................

Wasim khan wazir
by Wasim khan wazir , Finance Specialist , Mott Macdonald

B10.................................................................................

Mohammed Asim Nehal
by Mohammed Asim Nehal , M Asim Nehal & Co , Chartered Accountants

The answer is  :    14 *40/56  =10

$10

Gayasuddin Mohammed
by Gayasuddin Mohammed , Advocate , Practicing Law before High Court at Hyderabad

 (100 *14)/140  =10 => b. $10.00

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