Aunt Sally’s “New Orleans Most Famous Pralines” sells pralines costing $1.10 each to make. If Aunt Sally’s wants a 35% markup based on selling price and produces 45 pralines with an anticipated 15% spoilage, what should each praline be sold for?
To determine the selling price of each praline, we need to consider the cost to make each praline, the desired markup, and the anticipated spoilage.
Step 1: Calculate the cost to make each praline.
Given that each praline costs $1.10 to make, this is the cost price.
Step 2: Calculate the total cost of producing 45 pralines.
To do this, multiply the cost to make each praline by the number of pralines produced (45):
Total cost = $1.10/praline * 45 pralines
Step 3: Determine the total cost after accounting for anticipated spoilage.
If there is an anticipated 15% spoilage, we need to subtract this from the total cost:
Total cost after spoilage = Total cost * (100% - 15%)
Step 4: Calculate the desired markup based on selling price.
To markup the selling price by 35% based on selling price, we need to divide the total cost by (1 - markup percentage):
Selling price = Total cost after spoilage / (1 - markup percentage)
Step 5: Calculate the selling price per praline.
Finally, divide the selling price by the number of pralines to determine the selling price per praline:
Selling price per praline = Selling price / 45
Let's calculate this step-by-step:
Step 1: Cost to make each praline = $1.10
Step 2: Total cost = $1.10/praline * 45 pralines = $49.50
Step 3: Total cost after spoilage = $49.50 * (100% - 15%) = $41.93
Step 4: Selling price = $41.93 / (1 - 35%) = $64.50
Step 5: Selling price per praline = $64.50 / 45 pralines = $1.43 (rounded to two decimal places)
Therefore, each praline should be sold for approximately $1.43.
To calculate the selling price per praline, we need to consider the cost of making each praline, the desired markup, and the anticipated spoilage rate.
1. Calculate the cost of making each praline:
Aunt Sally’s pralines cost $1.10 each to make.
2. Determine the selling price per praline considering the desired markup:
Aunt Sally’s wants a 35% markup based on the selling price. This means the selling price will be 135% of the cost price.
Markup = 135% = 1 + 35% = 1.35
3. Take into account the anticipated spoilage rate:
Aunt Sally’s anticipates a 15% spoilage rate. This means we need to increase the selling price to cover the cost of pralines that will not be sold.
Final Selling Price = Selling Price per praline / (1 - Spoilage Rate)
Now let's calculate the selling price per praline:
Cost of making each praline = $1.10
Markup = 1.35 (35% markup = 1 + 35% = 1.35)
Spoilage Rate = 15% = 0.15
Final Selling Price = $1.10 / (1 - 0.15)
Final Selling Price = $1.10 / 0.85
Final Selling Price = $1.29 (rounded to the nearest cent)
Therefore, each praline should be sold for $1.29 to cover the production cost, desired markup, and anticipated spoilage rate.
lose means cost each is increased.
cost each after losses: 1.10(1.15)=1.27 each
with 35 precent markup,then the price should be 1.25*1.35=1.69 each