p5 december 2007 Q3 Healthy sandwiches Co.

625,000,000 x 4% = 25,000,000.

25,000,000 x 2.4 = 60,000,000

Thls is SFG’s sales, and contains a mark-up of 33 1/3.

Sales value to HSC is therefore 60m x 3/4 = 45m.

Cost + Profit = Sales

A markup means an amount added to cost, so

100 + 33 1/3 = 133 1/3

The relationship between costmand sales is therefore:

100:133 1/3

Or

3: 4

Costs are therefore 3/4 of sales.