PureSwing Golf, Inc. manufactures swing analyzer systems for golf instructors. Two of its systems, Pure1000 and the Pure 5000 have these characteristics: The Pure1000 sells for $1,000 installed and the Pure5000 sells for $1,750 installed.
Required:
1. What are the current profit margins on both systems?
2. PureSwing's management believes that it must drop the price on the Pure1000 to $800 and on the Pure5000 to $1,450 to remain competitive in the market. Recalculate profit margins for both products at these price levels.
3. Describe two ways that PureSwing could cut its costs to get the profit margins back to their original levels.

Question

PureSwing Golf, Inc. manufactures swing analyzer systems for golf instructors. Two of its systems, Pure1000 and the Pure 5000 have these characteristics:  The Pure1000 sells for $1,000 installed and the Pure5000 sells for $1,750 installed.
Required:
1. What are the current profit margins on both systems?
2. PureSwing's management believes that it must drop the price on the Pure1000 to $800 and on the Pure5000 to $1,450 to remain competitive in the market. Recalculate profit margins for both products at these price levels.
3. Describe two ways that PureSwing could cut its costs to get the profit margins back to their original levels.

Quizplus · Accepted Answer

The Answer of PureSwing Golf, Inc. manufactures swing analyzer systems for golf instructors. Two of its systems, Pure1000 and the Pure 5000 have these characteristics:  The Pure1000 sells for $1,000 installed and the Pure5000 sells for $1,750 installed.
Required:
1. What are the current profit margins on both systems?
2. PureSwing's management believes that it must drop the price on the Pure1000 to $800 and on the Pure5000 to $1,450 to remain competitive in the market. Recalculate profit margins for both products at these price levels.
3. Describe two ways that PureSwing could cut its costs to get the profit margins back to their original levels.