Hire Purchase

A housewares buyer plans a $15,000 promotion of decorative stepstools to retail at $25 each at a 48% markup. A local manufacturer supplies 500 stools for $14 each. What markup percentage must be obtained on the remainder of the planned purchase to reach the markup goal?
Quantity = 500 UR= $25 UC= $14
Local manufacturer supplies = 14 x 500 = 7,000
Total cost of manufacturing = 15,000 x 0.52 = $7,800
Total revenue = 25 x 500 = $12,500
Markup = 15,000 – 12,500 = 2,500
Retail generated = 7,800 – 7,000 = $800
Retail that’s left to generate = 2,500 – 800 = $1,700
Markup % = 1,700/ 2,500 = 68%

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