The XYZ Office Supplies Company sells calculators in bulk at wholesale prices, as well as individually at retail prices. Next year's sales depend on market conditions, but executives use probability to find estimates of sales for the coming year. The following tables are estimated for next years sales. What profit does XYZ Office Supplies Company expect to make for the next year if the profit from each calculator sold is $20 at wholesale and $30 at retail?

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MrRoyal MrRoyal · Answer 1 · 2020-02-08T14:02:01+01:00

Answer:

Expected Profit = $220,700

Step-by-step explanation:

(SEE ATTACHMENT BELOW)

Given

Wholesale = $20

Retail = $30

Total profit made = Profit made from wholesale + profit made from retails

We get total profit made from wholesale by getting the number of units sold

Number of units sold = 2000 * 0.1 + 5000 * 0.3 + 10000 * 0.4 + 20000 * 0.2

Units sold = 200 + 1500 + 4000 + 4000

Units sold = 9700

Wholesale Profit = Units * Wholesale price

Wholesale Profit = 9700 * $20

Wholesale Profit = $194,000

Similarly, We get total profit made from retail by getting the number of units sold

Number of units sold = 600 * 0.4 + 1000 * 0.5 + 1500 * 0.1

Units sold = 240 + 500 + 150

Units sold = 890

Retail Profit = Units * Retail price

Retail Profit = 890 * $30

Retail Profit = $26,700

Total Profit = Wholesale Profit + Retail Profit

Total Profit = $194,000 + $26,700

Total Profit = $220,700