Paul and Saul enterprises have been in the retail business for home furniture for two years now. In an attempt to support local suppliers, Paul and Saul bought a dining table from a local supplier in Twakolwa compound that must be retailed for K8000 to cover the cost of the table, overhead expenses of 50% of the cost, and a normal net profit of 25% of the cost. Furthermore, for the business to allow a 15% discount and still receive the required regular selling price, Paul and Saul enterprises decides to mark the dining that at a list price.
However, due to the economic woes that the country is facing and to consequent declining disposable household income, the dining table remained unsold and in the store. Thus, Paul and Saul enterprises decided to mark-down the dining table as part of the clearing of inventories exercise. To attain at the appropriate mark-down rate, Paul and Saul decided that the firm’s profit would have to be no less than 10% of the commission paid to the salesperson. Suppose the normal commission, which is 40% of the overhead expenses, was reduced by 33.3333%, what is the maximum rate of mark-down that can be advertised as an alternative to the normal 15%?

Answer rating: 100% (QA)

Given Retiled st 8000000 Given verhed exenses50f the retiled st 8000000504000000 Henethe ... View the full answer