Question

Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper costs $5 and has a sales price of $9. The high-end model costs $9 and sales for $15. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Based on this information what is the total number of clippers that must be sold to earn a $12,420 profit

Answer 1

Answer:

10,500

Explanation:

As per the given question the solution of the total number of clippers is provided below:-

Here we will assume the sales = x

((Economy clippers × Sales price) - (Economy clippers × Economy clipper cost)) + ((Remaining percentage × Sales) - (Remaining percentage × High end model cost) - Fixedd cost = Profit

= ((0.70x × $9) - (0.70x × $5)) + ((0.30x × $15) - (0.30x × $9)) - $35,880 = $12,420

= (6.3x - 3.5x) + (4.5x - 2.7x) = $35,880 + $12,420

= (2.8x + $1.8x) = $48,300

= 4.6x = $48300

x = $48,300 ÷ 4.6

x = $10,500

So, the total number of clippers that must be sold to earn a $12,420 profit = 10,500 clippers

Economy clippers is 70% of the market = 10,500 × 70%

= 7,350 clipper

High-end clippers is 30% of the market = 10500 × 30%

= 3,150 clipper

So, the total number of clippers = 7,350 clipper  + 3,150 clipper

= 10,500 clippers

Therefore by using the above formula we simply solve the total number of clippers.