Question

8. Big Sound Electronics purchased equipment from the manufacturer at a cost of $960 less 30% and 15%. According to Big Sound's pricing strategy, all merchandise is marked at a price that allows an ongoing discount of 20% and maintains a profit of 15% of regular selling price. Overhead expenses are 25% of regular selling price. During its annual Boxing Week sale, the usual discount of 20% was replaced by a markdown of 45% on selected models. What operating profit or loss was made during the Boxing Week Sale? /6

Answer 1

Answer 8=

Total cost== (960.00*0.7*0.85) = $571.20

Let the regular selling price is denoted as S

S = C + E + P

S = C + 0.25 S + 0.15 S

S= 571.20 + 0.40S

S= $952

So regular selling price S=$952

marked price be MP

Regula selling price =MP − Discount

MP − 0.20 MP = 952.00

MP=$1190

Boxing Week sale price = Marked price − Markdown

Boxing Week sale price = 1190.00 − 0.45*(1190.00)

Boxing Week sale price = $654.50

sale price = $654.50

Profit = Sale price − purchase cost − Expenses

Profit= 654.50 − 571.20 − 0.25*(952.00)

Profit =-$154.70

So operating loss of $154.70.

KINDLY RATE THE ANSWER AS THUMBS UP. THANKS A LOT.