John is the owner of a company that specializes in the manufacturing of office computers and printers. He recently received a large order from a company for 30 computers and 5 printers. In addition, the company tasked John with installing software into each of the computers.
The cost per computer is $500 and the cost per printer is $100. The cost of installing the software to run on all the computers is $2,000. If John wants to earn a 20% profit for the order, what would be the price he needs to charge?
Step 1: Calculate the total cost of the order (computers + printers + installation of software). $500 x 30 + $100 x 5 + $2,000 = $17,500 (total cost).
Step 2: Determine the selling price by using the desired percentage of 20%. 20% = (Selling Price – $17,500) / $17,500 therefore Selling price must be: $21,000 (selling price).
Therefore, for John to achieve the desired markup percentage of 20%, John would need to charge the company $21,000.
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Example
John is the owner of a company that specializes in the manufacturing of office computers and printers. He recently received a large order from a company for 30 computers and 5 printers. In addition, the company tasked John with installing software into each of the computers.
The cost per computer is $500 and the cost per printer is $100. The cost of installing the software to run on all the computers is $2,000. If John wants to earn a 20% profit for the order, what would be the price he needs to charge?
Step 1: Calculate the total cost of the order (computers + printers + installation of software). $500 x 30 + $100 x 5 + $2,000 = $17,500 (total cost).
Step 2: Determine the selling price by using the desired percentage of 20%. 20% = (Selling Price – $17,500) / $17,500 therefore Selling price must be: $21,000 (selling price).
Therefore, for John to achieve the desired markup percentage of 20%, John would need to charge the company $21,000.