Calculating Profit Golf Clubs R Us Sale Price And Discount
In this detailed analysis, we'll dissect a classic business problem involving Golf Clubs R Us, a retailer specializing in golf equipment. The challenge lies in determining the company's profit on a set of golf clubs that were sold at a discount. To unravel this, we'll meticulously follow a structured problem-solving approach, ensuring each step is clearly defined and executed. This method not only provides the answer but also enhances understanding of the underlying concepts. Understanding the nuances of pricing strategies and profit margins is crucial for businesses to thrive in competitive markets. Let's embark on this mathematical journey to calculate the profit earned by Golf Clubs R Us.
1. Understanding the Problem: Decoding the Discount and Profit Margin
Before diving into calculations, it's essential to fully grasp the problem's intricacies. Golf Clubs R Us offered a set of 10 golf clubs at a sale price of $590, which represented a 25% discount from the original selling price. The crucial piece of information here is the cost price for Golf Clubs R Us, which is $570. Our primary objective is to determine the profit the company made on this sale. To do this, we must first calculate the original selling price before the discount and then subtract the cost price from the sale price. The essence of profit calculation lies in accurately determining both the revenue generated and the expenses incurred. This initial step sets the stage for a systematic approach to solving the problem.
2. Devising a Plan: Charting the Course to Profit Calculation
With a clear understanding of the problem, we can now formulate a plan to arrive at the solution. The plan involves a series of logical steps:
- Calculate the original selling price of the golf clubs before the discount.
- Verify this original price by calculating the 25% discount and subtracting it from the original price to ensure it matches the sale price of $590.
- Calculate the profit by subtracting the cost price ($570) from the sale price ($590).
This methodical approach will ensure accuracy and clarity in our calculations. Strategic planning is the cornerstone of effective problem-solving, guiding us toward the desired outcome with precision.
3. Carrying Out the Plan: Executing the Calculations
Now, let's execute the plan step by step:
Step 1: Calculating the Original Selling Price
The sale price of $590 represents 75% (100% - 25% discount) of the original selling price. Let's denote the original selling price as 'x'. We can set up the following equation:
- 75x = $590
To find 'x', we divide both sides of the equation by 0.75:
x = $590 / 0.75 x = $786.67 (rounded to the nearest cent)
Therefore, the original selling price of the golf clubs was approximately $786.67. Accurate calculations are the bedrock of sound financial analysis, ensuring reliable results.
Step 2: Verifying the Original Price
To verify our calculation, we'll calculate the 25% discount on the original price and subtract it from the original price:
Discount Amount = 25% of $786.67 Discount Amount = 0.25 * $786.67 Discount Amount = $196.67 (rounded to the nearest cent)
Sale Price = Original Price - Discount Amount Sale Price = $786.67 - $196.67 Sale Price = $590
This confirms that our calculated original price is correct, as the discounted price matches the given sale price. Verification is a crucial step in problem-solving, ensuring the accuracy and reliability of the results.
Step 3: Calculating the Profit
Now that we have the sale price ($590) and the cost price ($570), we can calculate the profit:
Profit = Sale Price - Cost Price Profit = $590 - $570 Profit = $20
Therefore, Golf Clubs R Us made a profit of $20 on the sale of the golf clubs. Understanding profit margins is vital for businesses, as it directly impacts their financial health and sustainability.
4. Looking Back: Reviewing the Solution and Its Implications
Having arrived at the solution, it's crucial to reflect on the process and the result. We've successfully determined that Golf Clubs R Us made a profit of $20 on the sale of the golf clubs. However, it's important to note that this profit margin is relatively small compared to the cost price of the clubs. This could raise questions about the pricing strategy employed by the company. Was the discount too steep? Could the clubs have been sold for a higher price? These are the kinds of questions businesses need to consider when evaluating their pricing and sales strategies. A comprehensive review of the solution provides valuable insights, allowing for continuous improvement and informed decision-making.
In conclusion, by meticulously following a structured problem-solving process, we've successfully calculated that Golf Clubs R Us made a profit of $20 on the sale of the set of golf clubs. This exercise highlights the importance of understanding discounts, pricing strategies, and profit margins in the business world. While the profit itself may seem small, the process of calculating it provides valuable insights into the financial health of the company and the effectiveness of its pricing decisions. The significance of problem-solving extends beyond the immediate answer, offering a deeper understanding of the underlying dynamics and implications.
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