Question

A distributor purchased 600 golf sets at $350 each. The markup is 45% of the cost and overhead expense is 20% of the cost. It sold 30% of the sets at the regular selling price, 60% of the remaining sets at a discount of 30%, and the remaining sets at the cost price. Find the overall profit or loss on the sale of the golf sets.

Answer 1

Purchase price or cost price = 600 sets * $350 per set = $210000

Overhead expense = 20% * $210000 = $42000

Overhead expense per set = $42000 / 600 = $70 per set

Markup = 45% * of Purchase price = 45% * $210000 = $94500

Selling price = Purchase price + Overhead expense + Markup

Selling price = $210000 + $42000 + $94500 = $346500

Selling price per unit = $346500 / 600 = $577.5 per set

Profit or loss on selling at regular selling price of $577.5 per set is:

No. of sets sold = 30% of 600 = 180

Dollar sales value of 180 sets = 180 * $577.5 per set = $103950

Cost price per set = $350

Cost price of 180 sets = 180 * $350 = $63000

Overhead expense per set = $70 per set

Overhead expense of 180 sets = 180 * $70 = $12600

Profit from selling 180 sets = Sales value - Cost price - Overhead expense= $103950 - $63000 - $12600 = $28350

Profit or loss on selling 60% remaining sets at 30% discount is:

Remaining sets = 600 - 180 = 420

No. of sets sold at 30% discount = 420 * 60% = 252 sets

Sales price per set after 30% discount = $577.5 - (30% * $577.5) = $577.5 - $173.25 = $404.25

Dollar sales value of 252 sets = 252 * $404.25 per set = $101871

Cost price per set = $350

Cost price of 252 sets = 252 * $350 = $88200

Overhead expense per set = $70

Overhead expense of 252 sets = $70 * 252 = $17640

Profit from selling 252 sets = Sales value - Cost - Overhead expense = $101871 - $88200 - $17640 = - $3969

Profit or loss on selling remaining sets at cost price is:

Remaining sets = 600 - 180 - 252 = 168

Sales price per set = Cost price per set = $350

Dollar sales value of 168 sets = 168 * $350 per set = $58800

Cost price of 168 sets = 168 * $350 = $58800

Overhead expense per set = $70

Overhead expense of 168 sets = 168 * $70 = $11760

Profit from selling 168 sets = Sales value - Cost - Overhead expense = $58800 - $58800 - $11760  = - $11760

Overall profit or loss on sale of golf sets = $28350 + (- $3969) + (-$11760) = $12621