US CMA Part 2 · Chapter 6 · Question 12 of 22
Hanover Clocks prices products at full cost plus a 25% markup. If the full cost per unit is $80, what is the selling price?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $100
Explanation
Cost-plus price = full cost x (1 + markup) = $80 x 1.25 = $100. Dividing by (1 - 25%) gives $106.67, which would be a 25% margin on selling price rather than a 25% markup on cost.
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