A furniture dealer purchased a desk for $150 and then set the selling price equal to purchasing price plus a markup that was 40% of selling price. If the dealer sold the desk at selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?
A. $40
B. $60
C. $80
D. $90
E. $100
We can PLUG IN THE ANSWERS, which represent the profit.
When the current answer choice is plugged in, the profit must be equal to the markup.
Answer choice D: profit = 90.
Selling price = profit + purchase price = 90+150 = 240.
Markup = 40% of the selling price = .4(240) = 96.
Here, the profit is LESS than the markup.
Eliminate D.
Since the profit must be a greater value, the correct answer is
E.
Answer choice E: profit = 100.
Selling price = profit + purchase price = 100+150 = 250.
Markup = 40% of the selling price = .4(250) = 100.
Profit = markup = 100.
Success!
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