Walks Softly sells customized shoes. Currently, it sells 14,800 pairs of shoes annually at an average price of $79 a pair. The company is considering adding a lower-priced line of shoes that will sell for $59 a pair. The company estimates it can sell 4,800 pairs of the lower-priced shoes but will sell 1,900 less pairs of the higher-priced shoes by doing so. What is the amount of the sales that should be used when evaluating the addition of the lower-priced shoes?

Question

Business

Kolten

10 September, 14:38

Walks Softly sells customized shoes. Currently, it sells 14,800 pairs of shoes annually at an average price of $79 a pair. The company is considering adding a lower-priced line of shoes that will sell for $59 a pair. The company estimates it can sell 4,800 pairs of the lower-priced shoes but will sell 1,900 less pairs of the higher-priced shoes by doing so. What is the amount of the sales that should be used when evaluating the addition of the lower-priced shoes?

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Kaiden Reeves · Answer 1

133,100

Explanation:

The calculation of amount of the sales is shown below:-

Pair of shoes = 14,800

Price of shoes = 79

Current sales revenue = pair of shoes * price of a pair

= 14,800 * 79

= 1,169,200

Number of high priced shoes = 14,800 - 1,900

= 12,900

Sales revenue = number of high priced shoes * price of a pair

= 12,900 * 79

= 1,019,100

Number of low priced shoes = 4,800

Sales revenue = number of low priced shoes * sell of a pair

= 4,800 * 59

= 283,200

The total sales under proposed changes = Sales revenue of high priced shoes + Sales revenue of low priced shoes

= 1,019,100 + 283,200

= 1,302,300

Net increment sales = the total sales under proposed changes - current sales revenue

= 1,302,300 - 1,169,200

= 133,100