In a retail shop using a 75% cost-plus pricing strategy, what will be the promotional price of a new model of golf shoe originally costing $80 after a 25% discount?

In a retail shop using a 75% cost-plus pricing strategy, what will be the promotional price of a new model of golf shoe originally costing $80 after a 25% discount?

• A. $60
• B. $105
• C. $135
• D. $80

Answer: (B)

To determine the promotional price of the golf shoe using a cost-plus pricing strategy, first, you need to calculate the selling price before applying the discount. The original cost of the golf shoe is $80. With a cost-plus pricing strategy at a 75% markup, you would add 75% of the cost to the original price. First, calculate the markup: 75% of $80 is $60 (0.75 * 80 = 60). Now, add this markup to the original cost: $80 (original cost) + $60 (markup) = $140. This would be the price before any promotions or discounts are applied. Next, apply a 25% discount on this selling price. A 25% discount on $140 amounts to $35 (0.25 * 140 = 35). Thus, subtract the discount from the initial selling price: $140 - $35 = $105. Therefore, the promotional price after the discount would be $105. This confirms that the cost-plus pricing strategy leads to a higher price point before discounts, and calculating the discount correctly results in the correct promotional price that reflects the intended sales strategy.

To determine the promotional price of the golf shoe using a cost-plus pricing strategy, first, you need to calculate the selling price before applying the discount.

The original cost of the golf shoe is $80. With a cost-plus pricing strategy at a 75% markup, you would add 75% of the cost to the original price.

First, calculate the markup:

75% of $80 is $60 (0.75 * 80 = 60).

Now, add this markup to the original cost:

$80 (original cost) + $60 (markup) = $140.

This would be the price before any promotions or discounts are applied.

Next, apply a 25% discount on this selling price. A 25% discount on $140 amounts to $35 (0.25 * 140 = 35).

Thus, subtract the discount from the initial selling price:

$140 - $35 = $105.

Therefore, the promotional price after the discount would be $105. This confirms that the cost-plus pricing strategy leads to a higher price point before discounts, and calculating the discount correctly results in the correct promotional price that reflects the intended sales strategy.