30. A men’s accessories buyer purchases 10,000 neckties from a manufacturer at the low cost price of $16 per tie. Noticing that the ties are of two types, 6,200 solids and 3,800 stripes, the buyer decides to attempt some creative merchandising. If each solid tie is retailed at $45, what minimum retail price should be placed on each striped tie if the average markup of 68% is desired?
Total cost of neckties = 10,000 x $16 = $160,000
Retail price = 10,000 / (100 – 68%)
= $160,000 / 0.32 = $500,000
Solid tie = 6,200 x $45 = $279,000
Total retail price of stripes = $500,000 – $279,000 = $221,000
Total of 3,800 stripes
Avg retail price of tie = Total retail price of stripes / total stripes
Retail price per striped tie = $221,000 / 3,800 = $58.16