A distributor sells water cooling units for $840 each. The operating profit is 25% on cost and markup is 60% on cost.
What should be the rate of markdown offered to sell the machines at the cost price?

Let's break this problem into steps to determine the required markdown rate to sell the machines at cost price.

### Step 1: Define the variables.
- **Selling price (SP)** = \$840 (given).
- **Operating profit (Profit)** = 25% on cost.
- **Markup (MU)** = 60% on cost.

Let the **cost price (C)** of the water cooling units be $ C $.

### Step 2: Write the relationship between markup, cost price, and selling price.
The selling price is calculated as:

\[
SP = C + \text{Markup}
\]

Since the markup is 60% of the cost price, we can express this as:

\[
SP = C + 0.60C = 1.60C
\]

Given that the selling price is \$840, we can write:

\[
840 = 1.60C
\]

### Step 3: Solve for the cost price (C).
To find $ C $, divide both sides of the equation by 1.60:

\[
C = \frac{840}{1.60} = 525
\]

So, the cost price is **\$525**.

### Step 4: Calculate the markdown required.
To sell the water cooling unit at cost price, the selling price must be reduced from \$840 to \$525. The markdown is the difference between the original selling price and the cost price:

\[
\text{Markdown} = 840 - 525 = 315
\]

### Step 5: Calculate the markdown rate.
The markdown rate is the percentage reduction from the original selling price:

\[
\text{Markdown rate} = \frac{\text{Markdown}}{\text{Selling price}} \times 100 = \frac{315}{840} \times 100 = 37.5\%
\]

### Final Answer:
The required rate of markdown to sell the water cooling units at cost price is **37.5%**.

Would you like more details on this or have any further questions?

Here are 5 related questions you might find helpful:
1. How is the markup percentage calculated in general?
2. What is the difference between markup and profit margin?
3. How can a markdown affect the overall profitability of a business?
4. What are some common strategies to calculate optimal selling prices?
5. How can operating costs influence the pricing strategies of distributors?

**Tip:** Always separate operating profit from markup to avoid confusion in pricing calculations.

A distributor sells water cooling units for $840 each. The operating profit is 25% on cost and markup is 60% on cost. What should be the rate of markdown offered to sell the machines at the cost price?

Learn how to calculate the required markdown rate to sell water cooling units at cost price. This problem involves determining the cost price based on a selling price of $840, a 60% markup on cost, and a 25% operating profit. Detailed step-by-step solution for high school students in Grades 9-12.

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