A lawnmower manufacturer has a unit cost of $140 and wishes to achieve a margin of 30% based on selling price. If the manufacturer sells directly to a retailer who then adds a set margin of 40% based on selling price, determine the retail price charged to consumers.
Please note: I figured this one way and my partner another — both are below which is right and why?
40 * 1.3 * 1.4 = 254.8
Manufacturer sells to retailer for
140 * 1.3 = 182
Retailer sells it to consumer for
182 * 1.4 = 254.8
$254.80
OR
Marufacturer’s price = cost = $140 = $200
(1-markup) (1-.3)
Retailer’s price = cost = $200 = $333.33
(1-markup) (1-.4)
Expert Answer
The manufacturer is selling the
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