Answer:
Explanation:
The cost to make each Poppy Lapel Pin is £1.10, and the company made 1000 of them, so the total cost of production is:
Total cost = Cost per unit x Number of units
Total cost = £1.10 x 1000
Total cost = £1,100
35% of the lapel pins are given to charity, which means the remaining 65% are sold. This is 650 lapel pins that are sold.
60% of the sold lapel pins are sold at £3.00 each, which means the company sells 390 lapel pins at £3.00 each. This results in sales revenue of:
Revenue from £3.00 lapel pins = Number of £3.00 lapel pins sold x Price per lapel pin
Revenue from £3.00 lapel pins = 390 x £3.00
Revenue from £3.00 lapel pins = £1,170
40% of the sold lapel pins are sold at £5.00 for 2, which means the company sells 260 sets of lapel pins. Each set contains 2 lapel pins, so the company sells 520 lapel pins at £2.50 each. This results in sales revenue of:
Revenue from £5.00 for 2 lapel pins = Number of sets sold x Price per set
Revenue from £5.00 for 2 lapel pins = 260 x £5.00
Revenue from £5.00 for 2 lapel pins = £1,300
The total revenue is:
Total revenue = Revenue from £3.00 lapel pins + Revenue from £5.00 for 2 lapel pins
Total revenue = £1,170 + £1,300
Total revenue = £2,470
The profit is the difference between the revenue and the cost of production, which is:
Profit = Total revenue - Total cost
Profit = £2,470 - £1,100
Profit = £1,370
The percentage profit is calculated as:
Percentage profit = (Profit ÷ Total cost) x 100%
Percentage profit = (£1,370 ÷ £1,100) x 100%
Percentage profit = 124.55%
Therefore, the company should make a 124.6% profit.