The part department profit is 12 percent on a new part. How much does the part cost if the selling price is $145.60?

The part department profit is 12 percent on a new part. How much does the part cost if the selling price is $145.60?

• A. $148.00
• B. $130.00
• C. $140.00
• D. $125.00

Answer: (B)

When profit is a percentage of cost, the selling price equals the cost plus that profit, which is cost times (1 + rate). So the cost can be found by dividing the selling price by 1.12 (since 12% profit means multiplying cost by 1.12). Compute: 145.60 ÷ 1.12 = 130.00. Check: 12% of the cost is 0.12 × 130 = 15.60. Adding that to the cost gives 130 + 15.60 = 145.60, which matches the selling price. So the part cost is $130.

When profit is a percentage of cost, the selling price equals the cost plus that profit, which is cost times (1 + rate). So the cost can be found by dividing the selling price by 1.12 (since 12% profit means multiplying cost by 1.12).

Compute: 145.60 ÷ 1.12 = 130.00.

Check: 12% of the cost is 0.12 × 130 = 15.60. Adding that to the cost gives 130 + 15.60 = 145.60, which matches the selling price. So the part cost is $130.