Duckworth's Bird Supplies purchased sets of cages for $160.00 less 9%, 14%. Expenses are 17% of the regular selling price and the required profit is 55% of the regular selling price. The store decided to change the regular selling price so that it could offer a 25% discount without affecting its margin. During the Christmas season, the unsold sets were advertised at a discount of 25%. What operating profit or loss was realized on the sets sold during the Christmas season?

Question

Quizplus · Accepted Answer

First, calculate the cost price after discounts: $160 - 9% = $160 - $14.40 = $145.60. Then, $145.60 - 14% = $145.60 - $20.38 = $125.22. The expenses are 17% of the regular selling price, and the profit required is 55% of the regular selling price, totaling 72% of the regular selling price. To maintain the same profit margin with a 25% discount, the new selling price must be set so that 75% of it equals the sum of the cost, expenses, and required profit. Let x be the regular selling price. Thus, 0.75x = 1.72 * $125.22. Solving for x gives a regular selling price that, when discounted by 25%, still covers the cost, expenses, and required profit. The operating profit is the difference between the selling price after the discount and the total costs (including expenses).

Duckworth's Bird Supplies Purchased Sets of Cages for $160