Question

Revenue: $500,000 Shoes: $250,000 Shoe boxes: $1,000 Advertising: $500 Rent: $1,000 Depreciation: $25 Knowing she has sold 5,000 pairs, assume the company wants to launch a Black Friday promotion, where she would discount her shoes by 10%. How many more shoes would she have to sell to justify this promotion? A. 25.13% more shoes B. 20.08% more shoes C. None of the above, but I could calculate this with the information I am given. D. None of the above, I cannot calculate this with the information I am given.

Answer 1

A. 25.13% more shoes

Step-by-step explanation:

The company has annual revenue of $500,000 and it sells 5000 pair of shoes. The company wants to offer 10% discount to its customers on Black Friday Promotion. The revenue needs to be maintained. The current sales per shoes is $100 ($500,000 / 5,000 pairs of shoes). When the company offers promotion there is 10% discount in its selling price. The new selling price will be $90.

The revenue is to be maintained at $500,000 and the new pairs of shoes sold will be 5,555 pairs of shoes ($500,000/ $90 / pair of shoe)

The shoes sold in promotion are 25.13% more than the previously sold.