In the
distribution of product X,
Ann sold to Kris at a profit of 20%.
Kris at a profit of 10%
and Stone sold to Ivy at a profit of 25%.
If product X had cost
Ann a sum of $15, calculate
a) The
find selling price
b) The
cumulative profit percentage.
Solution
Arrange the chain
of distribution as follows as per cost and profits.
Ann – Kris –
Stone – Ivy = $15 - $20% - 10% - 25%
Cost of X
to Ann = $15.00
Add: Profit to Ann (20%
x $15) 3.00
Cost of X
to Kris 18.00
Add: Profit to Kris (10%
x $18)
1.80
Cost of X
to Stone 19.80
Add: Profit to Stone (25%
x $19.8)
4.95
Cost of X
to Ivy 24.75
Thus, final
selling price is $24.75
Final profit percentage is computed thus.
(final sales price – initial cost*100%)/Initial Cost
= (24.75 – 15) * 100%
/ 15 = 9.75
* 100% /15
= 975
÷ 15
= 65%
Thus,
cumulative profit percentage is 65%
Method 2
Final
percentage profit is gotten by multiplying all the series of sales prices as
follows:
1.20 * 1.10 * 1.25 =
1.65
So profit =
1.65 – 1 = 0.65
=
65%
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