Section: Principles of Marketing

20) Suzanne wants to start giving tennis lessons to children, and needs to determine the cost in selling price she should charge for lessons. Her friend told her that the markup percent on cost should be 15% and that the amount of markup should be $17.00. What is her cost in selling price?

1. cost = $100.00; selling price = $25.00
2. cost = $100.00; selling price = $48.55
3. cost = $13.00; selling price = $38.00
4. cost = $113.33; selling price = $130.33
5. cost = $113.33; selling price = $166.66

First we will need to calculate the cost. The formula needed to calculate this is: Markup Percent on Cost * Cost = Amount of Markup. When we plug the numbers in, we have: .15 * Cost = $17. This gives us $113.33. Now we can calculate the selling price by setting it equal to Selling Price = Cost + Markup, which gives us: Selling Price = $113.33 + .15($113.33) or $130.33.