Company x uses a markup on cost of 55% to establish its retail prices.This pricing rule builds on a profit of 22% of cost. What rate of markdown can Company X offer to break even on the reduced price?
I have tried 33 as they are covering the cost to break even, 22 to say there is no profit. Also, I tried to say that S is 1.55 C and S reduced is C but is not 55.
If an item costs $\$1$ to produce then its price is marked as $\$1.55$. If the profit is $\$0.22$, then reducing $\$1.55$ to $\$1.33$ will break even. So percentage reduction on marked price is:
$$\frac{1.55-1.33}{1.55}\cdot 100 = 14.2\%$$