.Every week a store buys 30 gallons of milk at a cost of 1.58 per gallon. The store owner anticipates a 15% spoilage rate. In order to achieve a 20% markup based on selling price, what should be the selling price per gallon?
30 * 1.58 = 47.40 cost
47.40 marked up 20% for desired total selling price= 47.4 + 47.4*0.2 = $56.88
of the 30 gallons, 15% will be unsellable = 30* 0.15 = 4.5 gallons
30 - 4.5 = 25.5 gallons sellable
$56.88 / 25.5 = $2.23 is price to sell good milk for to cover loss of 15% and still achieve 20% markup on investment costs.