ACTIVITY 2:
DIRECTIONS: Read and analyze the problem below. Write down your answer to the following questions on your notebook.
PROBLEM 1: You have a friend who needs medical assistance. You and your friend decided to start a business wherein the profit will be allotted to her medical assistance. Suppose that you started a food business and the cost of each meal is ₱50.
QUESTIONS for PROBLEM 1:
1. If you and your friend wanted to put a 20% mark-up based on the cost, how much is your mark-up? Show your solution.
2. How much would be the selling price of each meal? Show your solution.
3. During weekends, you put a 5% markdown based on the selling price on each meal to increase the demand of your product. How much is each meal during weekend? Show your solution.
4. If you want to price each meal at ₱85, at what rate is the mark-up based on cost? Show your solution.
PROBLEM 2: Suppose your family owns a clothing line company. You purchased a cotton for ₱85 per meter. The operating expenses is 20% of the cost and you want to earn a profit that is 30% of the cost.
QUESTIONS for PROBLEM 2:
1. How much mark-up should the company put on the cotton? Show your solution.
2. How much will be the selling price of the cotton? Show your solution.
3. What is the mark-up rate based on the cost? Show your solution.
Answer (1)
Answer:Let's break down these business problems step-by-step.PROBLEM 1: Food Business for Medical AssistanceGiven:Cost of each meal = ₱501. If you and your friend wanted to put a 20% mark-up based on the cost, how much is your mark-up? Show your solution.Concept: Mark-up based on cost is calculated by multiplying the cost by the mark-up rate.Formula: Mark-up Amount = Cost × Mark-up RateSolution:Mark-up Amount = ₱50 × 20%Mark-up Amount = ₱50 × 0.20Mark-up Amount = ₱10Answer: Your mark-up would be ₱10.2. How much would be the selling price of each meal? Show your solution.Concept: The selling price is the sum of the cost and the mark-up amount.Formula: Selling Price = Cost + Mark-up AmountSolution:Selling Price = ₱50 + ₱10Selling Price = ₱60Answer: The selling price of each meal would be ₱60.3. During weekends, you put a 5% markdown based on the selling price on each meal to increase the demand of your product. How much is each meal during weekend? Show your solution.Concept: Markdown is a reduction from the selling price. The new price is the selling price minus the markdown amount.Formulas:Markdown Amount = Selling Price × Markdown RateWeekend Price = Selling Price - Markdown AmountSolution:Markdown Amount = ₱60 × 5%Markdown Amount = ₱60 × 0.05Markdown Amount = ₱3Weekend Price = ₱60 - ₱3Weekend Price = ₱57Answer: Each meal would be ₱57 during the weekend.4. If you want to price each meal at ₱85, at what rate is the mark-up based on cost? Show your solution.Concept: The mark-up rate based on cost is the mark-up amount divided by the cost, expressed as a percentage. First, find the mark-up amount.Formulas:Mark-up Amount = Selling Price - CostMark-up Rate (based on Cost) = (Mark-up Amount / Cost) × 100%Solution:Mark-up Amount = ₱85 - ₱50Mark-up Amount = ₱35Mark-up Rate = (₱35 / ₱50) × 100%Mark-up Rate = 0.70 × 100%Mark-up Rate = 70%Answer: The mark-up rate based on cost would be 70%.PROBLEM 2: Clothing Line CompanyGiven:Cost of cotton = ₱85 per meterOperating Expenses = 20% of the CostDesired Profit = 30% of the Cost1. How much mark-up should the company put on the cotton? Show your solution.Concept: The total mark-up includes both the operating expenses and the desired profit, both calculated based on the cost.Formulas:Operating Expenses Amount = Cost × Operating Expenses RateProfit Amount = Cost × Profit RateTotal Mark-up = Operating Expenses Amount + Profit AmountSolution:Operating Expenses Amount = ₱85 × 20%Operating Expenses Amount = ₱85 × 0.20Operating Expenses Amount = ₱17Profit Amount = ₱85 × 30%Profit Amount = ₱85 × 0.30Profit Amount = ₱25.50Total Mark-up = ₱17 + ₱25.50Total Mark-up = ₱42.50Answer: The company should put a ₱42.50 mark-up on the cotton.2. How much will be the selling price of the cotton? Show your solution.Concept: The selling price is the sum of the cost and the total mark-up.Formula: Selling Price = Cost + Total Mark-upSolution:Selling Price = ₱85 + ₱42.50Selling Price = ₱127.50Answer: The selling price of the cotton will be ₱127.50 per meter.3. What is the mark-up rate based on the cost? Show your solution.Concept: The mark-up rate based on cost is the total mark-up amount divided by the cost, expressed as a percentage.Formula: Mark-up Rate (based on Cost) = (Total Mark-up / Cost) × 100%Solution:Mark-up Rate = (₱42.50 / ₱85) × 100%Mark-up Rate = 0.50 × 100%Mark-up Rate = 50%Answer: The mark-up rate based on the cost is 50%.Step-by-step explanation:
