You estimate a selling price of about $335 for the Carnaby Street mini-dress and $285 for the rock star ensemble. Profit for the mini-dress is 43 percent and 36 percent for the ensemble. To decide between these two choices, what would be the most useful thing to calculate?

Question

Marcus Freeman

Business

14 January, 21:39

You estimate a selling price of about $335 for the Carnaby Street mini-dress and $285 for the rock star ensemble. Profit for the mini-dress is 43 percent and 36 percent for the ensemble. To decide between these two choices, what would be the most useful thing to calculate?

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Answers (1)

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Prince Chavez · Answer 1

Number of each dress that can be sold.

Explanation:

Here, selling price and profit margin of both products, mini dress and ensemble are given. At the outset, it may seem that mini - dress is a profitable venture than ensemble as it is sold a higher price and profit margin. However, suppose 100 units of mini dress could be sold earning a profit of $14,405 (335*100*0.43).

If 200 units of ensemble could be sold, it would earn the seller a profit of $20,520 (285*200*0.36).

So in order to make a decision, the seller should estimate the number of each of the product to be sold such that profit earned from each product is equal.