A wholesaler sells a product to a retailer at a price of $400, which includes a

A wholesaler sells a product to a retailer at a price of $400, which includes a profit margin of 25%. What was the cost price for the wholesaler?

A wholesaler sells a product to a retailer at a price of $400, which includes a profit margin of 25%. What was the cost price for the wholesaler?

Step 1: Understand that the wholesaler sells a product for $400, which includes a profit margin of 25%.
Step 2: Let the cost price for the wholesaler be represented as 'x'.
Step 3: The profit margin of 25% means the wholesaler makes 25% of the cost price as profit. This can be written as 0.25x.
Step 4: The selling price is the cost price plus the profit. So, Selling Price = Cost Price + Profit = x + 0.25x.
Step 5: Combine the terms: x + 0.25x = 1.25x.
Step 6: Set the equation equal to the selling price: 1.25x = $400.
Step 7: To find 'x', divide both sides of the equation by 1.25: x = $400 / 1.25.
Step 8: Calculate the value: x = $320.

Profit Margin Calculation – Understanding how to calculate the cost price from the selling price and profit margin.
Algebraic Manipulation – Using algebra to set up and solve equations based on given relationships.