lipper Company sells two types of nail clippers. One focuses on the economy orie

Question

lipper 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?

Explanation / Answer

Let sales be x... So,

[(0.70x *9) - (0.70x*5)] + [ ( 0.30x * 15) - (0.30x * 9) ] - 35880 => $12420

(6.3x - 3.5x) + ( 4.5x - 2.7x) => 12420+35880

2.8x + 1.8x => $48300

x => 48300/4.6

x => 10500

The total number of clippers that must be sold to earn a $12,420 profit => 10500 clippers

Economy clippers constitute 70 percent of the market => 10500 *70%=> 7350 clipper

high-end clippers constitute 30 percent of the market => 10500*30% => 3150 clipper

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