Math Problem Statement

A store in Vancouver has operating expenses of 25% of the selling price and the operating profit is 35% of the selling price. During a sale, their watches were marked down by 30%. What is the profit or loss at the sale price if they purchased the watches at $619 each?

Solution

To determine the profit or loss at the sale price, we need to follow these steps:

  1. Determine the original selling price of the watches: Since the operating profit is 35% of the selling price, we can denote the original selling price as SS.

  2. Calculate the sale price: The sale price is obtained by marking down the original selling price by 30%.

  3. Calculate the profit or loss at the sale price: Subtract the purchase cost and operating expenses from the sale price to find the profit or loss.

Let's go through each step in detail.

Step 1: Determine the Original Selling Price

We know that the operating profit is 35% of the selling price SS, and the operating expenses are 25% of SS.

Given:

  • Purchase price P=619P = 619
  • Operating expenses =0.25S= 0.25S
  • Operating profit =0.35S= 0.35S

The cost of the watch to the store can be expressed as: Cost=Purchase price+Operating expenses\text{Cost} = \text{Purchase price} + \text{Operating expenses} Cost=619+0.25S\text{Cost} = 619 + 0.25S

The store's revenue (original selling price SS) should equal the cost plus the operating profit: S=619+0.25S+0.35SS = 619 + 0.25S + 0.35S S=619+0.60SS = 619 + 0.60S

To find SS, we solve the equation: S0.60S=619S - 0.60S = 619 0.40S=6190.40S = 619 S=6190.40S = \frac{619}{0.40} S=1547.50S = 1547.50

Step 2: Calculate the Sale Price

The sale price after a 30% markdown is: Sale Price=S×(10.30)\text{Sale Price} = S \times (1 - 0.30) Sale Price=1547.50×0.70\text{Sale Price} = 1547.50 \times 0.70 Sale Price=1083.25\text{Sale Price} = 1083.25

Step 3: Calculate the Profit or Loss at the Sale Price

The profit or loss at the sale price is calculated by subtracting the purchase price and operating expenses from the sale price.

Profit/Loss=Sale PricePurchase PriceOperating Expenses\text{Profit/Loss} = \text{Sale Price} - \text{Purchase Price} - \text{Operating Expenses} Profit/Loss=1083.25619(0.25×1547.50)\text{Profit/Loss} = 1083.25 - 619 - (0.25 \times 1547.50) Profit/Loss=1083.25619386.875\text{Profit/Loss} = 1083.25 - 619 - 386.875 Profit/Loss=77.375\text{Profit/Loss} = 77.375

Conclusion

The profit at the sale price is $77.375 per watch.

Do you want any more details or have any questions?

Here are 5 numbered questions for you to ask:

  1. How do I calculate the break-even point for my business?
  2. Can you explain how to derive the quadratic formula?
  3. What are the steps to solve a system of linear equations?
  4. How do I find the derivative of a composite function?
  5. What is the difference between permutations and combinations?

Tip: Always double-check your calculations to ensure accuracy, especially when dealing with percentage changes and financial figures.

Ask a new question for Free

By Image

Drop file here or Click Here to upload

Math Problem Analysis

Mathematical Concepts

Percentage Calculations
Profit and Loss

Formulas

-

Theorems

-

Suitable Grade Level

Grades 10-12