4. Jason buys 3 different types of bucket hats and sells them at markets.

[tex]\[
\begin{tabular}{|l|c|c|}
\hline
& \text{Cost per Hat:} & \text{Number bought:} \\
\hline
\text{Type A} & \text{R75} & \text{150} \\
\hline
\text{Type B} & \text{R70} & \text{300} \\
\hline
\text{Type C} & \text{R86} & \text{200} \\
\hline
\end{tabular}
\][/tex]

4.1 His markup is [tex]45\%[/tex] on all his hats. Calculate the selling price of each type of hat.

4.2 Calculate the profit he makes if he sells all of the hats.

4.3 After 4 months, he has only sold 20 of the Type C hats. He decides to offer a [tex]30\%[/tex] discount on the selling price of these hats. Calculate his total income if he sells all the Type C hats at the reduced price.

4.4 Matthew states that Jason would make no profit due to reducing the price. Verify, showing all calculations, if this statement is correct.



Answer :

Sure, let's solve Jason's problem step-by-step:

4.1 Calculate the selling price of each type of hat with a 45% markup:

For Type A:
- Cost per hat: R75
- Markup: 45%
- Selling price = Cost + Markup
[tex]\[ \text{Selling price of Type A} = 75 + (75 \times 0.45) = 75 + 33.75 = R108.75 \][/tex]

For Type B:
- Cost per hat: R70
- Markup: 45%
- Selling price = Cost + Markup
[tex]\[ \text{Selling price of Type B} = 70 + (70 \times 0.45) = 70 + 31.50 = R101.50 \][/tex]

For Type C:
- Cost per hat: R86
- Markup: 45%
- Selling price = Cost + Markup
[tex]\[ \text{Selling price of Type C} = 86 + (86 \times 0.45) = 86 + 38.70 = R124.70 \][/tex]

4.2 Calculate the profit if all hats are sold at the marked-up price:

For Type A:
- Profit per hat = Selling price - Cost
[tex]\[ \text{Profit per Type A hat} = 108.75 - 75 = R33.75 \][/tex]
- Total profit for Type A:
[tex]\[ \text{Total profit for Type A} = 33.75 \times 150 = R5062.50 \][/tex]

For Type B:
- Profit per hat = Selling price - Cost
[tex]\[ \text{Profit per Type B hat} = 101.50 - 70 = R31.50 \][/tex]
- Total profit for Type B:
[tex]\[ \text{Total profit for Type B} = 31.50 \times 300 = R9450.00 \][/tex]

For Type C:
- Profit per hat = Selling price - Cost
[tex]\[ \text{Profit per Type C hat} = 124.70 - 86 = R38.70 \][/tex]
- Total profit for Type C:
[tex]\[ \text{Total profit for Type C} = 38.70 \times 200 = R7740.00 \][/tex]

Adding these up:
[tex]\[ \text{Total profit if all are sold at full price} = 5062.50 + 9450.00 + 7740.00 = R22252.50 \][/tex]

4.3 Calculate total income if Type C hats are sold at a 30% discount after selling 20 at full price:

- Number of Type C hats sold at full price: 20
- Number of Type C hats sold at a discount: 200 - 20 = 180
- Discounted selling price of Type C hat:
[tex]\[ \text{Discounted selling price} = 124.70 \times (1 - 0.30) = 124.70 \times 0.70 = R87.29 \][/tex]

Calculate total income:
- Income from 20 hats sold at full price:
[tex]\[ \text{Income from 20 hats} = 20 \times 124.70 = R2494.00 \][/tex]
- Income from 180 hats sold at a discount:
[tex]\[ \text{Income from 180 hats} = 180 \times 87.29 = R15712.20 \][/tex]

Total income from all Type C hats:
[tex]\[ \text{Total income from Type C hats} = 2494.00 + 15712.20 = R18206.20 \][/tex]

4.4 Verify if Jason makes no profit due to the reduced price:

Calculate the profit for all hats considering the discount:

For Type C:
- Profit per hat sold at full price:
[tex]\[ \text{Profit for 20 hats} = (124.70 - 86) \times 20 = 38.70 \times 20 = R774.00 \][/tex]
- Profit per hat sold at a discount:
[tex]\[ \text{Profit for discounted hats} = (87.29 - 86) \times 180 = 1.29 \times 180 = R232.20 \][/tex]
- Total profit for Type C:
[tex]\[ \text{Total profit for Type C} = 774.00 + 232.20 = R1006.20 \][/tex]

Adding this with the previously calculated profits for Type A and Type B:
[tex]\[ \text{Total profit} = 5062.50 + 9450.00 + 1006.20 = R15518.70 \][/tex]

So, Matthew's statement that Jason would make no profit due to reducing the price is incorrect. Jason would still make a profit, but it would be less than originally projected:
- Initial profit if all Type C hats sold at full price:
[tex]\[ R7740.00 \][/tex]
- Reduced profit including discount on Type C hats:
[tex]\[ R1006.20 \][/tex]
- Net profit comparison shows Jason still earns a profit:
[tex]\[ R15518.70 \][/tex]

Thus, these calculations confirm that Jason will still make a profit even after selling the Type C hats at a discounted price.