Profit Calculation from Car Sales

What was the dealership's profit on these two vehicles?

How did the dealership determine the markup for the sedan it sold?

What was the markup price for the trade-in?

Answer:

The dealership's profit on two automobiles is calculated as follows: $2550 + $1000 = $3550 (sedan markup price + trade-in markup price).

A dealership recently sold a four-door sedan it purchased for $17,000 at 15% markup. It accepted a trade-in for it, and it paid $4000 for the trade. The next day, it marked it up 25% and sold it in a week. The dealership's profit on two automobiles is $3550.

Markup Calculation:

A dealership paid $17,000 for a four-door vehicle and later sold it for a 15% markup. To calculate the markup price, 15% is expressed as a decimal: 0.15 x $17,000 = $2550.

Trade-In Markup Price:

The customer received $4000 from the dealership as a trade-in, which was then sold the following week for a 25% markup. To determine the markup price for the trade-in, 25% is represented as a decimal: 0.25 x $4,000 = $1,000.

Profit in business is crucial for success. It is the income that accrues to the owner after the completion of a successful market production process. Profitability is measured by profit, which demonstrates the success of the income-formation process in market production. Balancing revenue generation and distribution is essential for forming income in market production.