Cost, Overhead, Selling Price, and Profit
Date: 06/24/2008 at 14:27:10 From: Vivian Subject: word problem on finding the selling price Larry's Lamp Shop buys lamps for $18 each. If Larry's overhead is $7.29 per lamp and he makes a profit of $3.38 per lamp, what is the selling price of each lamp? What does the overhead mean? Does it mean the mark up price? This entire question's wording is very confusing to me. I tried: 7.29 - 3.38 = 3.91 18 + 3.91 = 21.91 but the answer in the book says it is $28.67.
Date: 06/24/2008 at 19:31:26 From: Doctor Achilles Subject: Re: word problem on finding the selling price Hi Vivian, Thanks for writing to Dr. Math. The overhead is all the other expenses Larry has. The gas it takes him to get in to work each day, the rent he pays on his building, the electricity bill, and so on. Let's say he buys the lamps for $20 each, plus he spends an average of $5 per lamp on overhead. If he sells each lamp for $28, what is his profit? Total-price = item-cost + profit + overhead $28 = $20 + profit + $5 $28 = $25 + profit $3 = profit So in the problem I made up, profit is $3. Do you understand how I solved the problem I made up? If you don't, please tell me what about it is confusing. Now that you have seen me solve that problem, can you figure out how to solve your problem? If you're still stuck or you want me to check your answer, please write back and show me the steps you've tried so I can help you find the right answer. - Doctor Achilles, The Math Forum http://mathforum.org/dr.math/
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