A store is instructed by corporate headquarters to put a markup of 11% on all items. An item costing $27 is displayed by the store manager at a selling price of $3. As an employee, you notice that this selling price is incorrect. Find the correct selling price. What was the manager's likely error?
Accepted Solution
A:
Answer: The correct selling price is $29.97.Step-by-step explanation:Since we have given that Cost price of an item = $27Mark up rate = 11%So, Amount of mark up would be[tex]\dfrac{11}{100}\times 27\\\\=\$2.97[/tex]So, Amount after mark up would be [tex]\$27+\$2.97\\\\=\$29.97[/tex]Hence, the correct selling price is $29.97.The manager's likely error is that he has put the selling price the mark up amount only i.e $2.9≈$3 instead of adding the mark up amount to the cost price.