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In: Statistics and Probability

The department store Engelhorn sold 85 Hugo Boss men’s suits for the regular price of $...

The department store Engelhorn sold 85 Hugo Boss men’s suits for the regular price of $ 400. For the summer sale, the suits were reduced to $ 200 and 142 were sold. At the final clearance, the price was reduced to $ 100 and the remaining 73 suits were sold. What was the weighted mean price of a Hugo Boss suit? Engelhorn paid $200 a suit for the 300 suits. Comment on the store’s profit per suit if a salesperson receives a $ 25 commission for each one sold.

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Expert Solution

Regular selling price of 85 suits = $ 400.

Summer discounted price of 142 suits = $200

Clearance sale price of 73 suits = $100.

Total number of suits = 300

Total sales of Hugo Boss = Regular price * Suits sold + Discounted price * Suits sold + Clearance sale * Suits Sold)

= (400 * 85 + 200 * 142 + 100 *73) = $69,700

Therefore, weighted selling price of the total 300 suits =

(Regular price * Suits sold + Discounted price * Suits sold + Clearance sale * Suits Sold) / Total number of suits sold

= (400 * 85 + 200 * 142 + 100 *73) / 300 = 69700 / 300 = $232.33.

Therefore, the weighted mean price of Hugo Boss suit = $232.33.

Cost price of each suits = $200

Cost price of 300 suits = $200 * 300 = $60,000.

Commission of salesperson for one suit = $25.

Total Commission of salesperson for 300 suits = $25 * 300 = $7500.

Therefore, total cost of 300 suits = Cost price of 300 suits + Total Commission = 60,000 + 7500 = $ 67,500

Total sales of 300 suits = $69,700

Therefore, Profit from the suits = $69,700 -  $ 67,500 = $2200

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orchestra answered 2 years ago
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