Question
Assuming that the boutique plans to increase the price
of Casual Wear by 10% next quarter, and If the same quantity of 600 units is sold at this new price, determine how much the overall profit increases compared to the previous calculations. Direction: A small business, Trendy Boutique , specializes in three types of clothing items: Designer Dresses , Casual Wear , and Formal Suits . Over the past six months, the boutique has recorded sales data as follows: Designer Dresses: Cost Price (CP): ₹1,500, Selling Price (SP): ₹2,200 Casual Wear: Cost Price (CP): ₹800, Selling Price (SP): ₹1,200 Formal Suits: Cost Price (CP): ₹2,500, Selling Price (SP): ₹3,500 The total units sold over six months for each clothing item are as follows: Designer Dresses: 300 units Casual Wear: 600 units Formal Suits: 200 units During this period, the boutique encountered some fluctuations in sales due to seasonal demand, which affected the profit margins for each product category.Solution
New Selling Price for Casual Wear = 1,200 + (10% of 1,200) = 1,200 + 120 = ₹1,320 Total Revenue from selling 600 units = 600 × 1,320 = ₹792,000 overall profit increases = 600 × 1,320 - 600 × 1,200 = 792,000 – 720,000 = 72,000
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