SUMMARY
The selling price for cucumbers, including VAT, must account for a 42% profit margin on the selling price and a 14% VAT applicable to food. Given a purchase price of $1.30 and a wastage rate where only 90% of cucumbers are sold, the equation to determine the selling price (p) is derived from the profit formula: 0.9p - 0.14(0.9p - 1.30) = 0.42. Solving this equation provides the necessary selling price to achieve the desired profit margin after accounting for VAT and wastage.
PREREQUISITES
- Understanding of profit margin calculations
- Basic knowledge of VAT and its application
- Ability to solve algebraic equations
- Familiarity with percentage calculations
NEXT STEPS
- Learn how to calculate profit margins in retail pricing
- Study VAT regulations and their impact on pricing strategies
- Explore algebraic methods for solving equations
- Research inventory management techniques to minimize wastage
USEFUL FOR
Retail managers, grocery store owners, financial analysts, and anyone involved in pricing strategies and profit margin calculations in the food industry.