A jewellery store purchased a diamond ring for $2500 less 40% and 5%. The store’s average unit overhead expenses are 30% of cost. The “regular price” of the ring is established so that, if it is sold in a “20% off ” sale, the unit operating profit at the reduced price will be 20% of cost.
a. What is the reduced price of the ring in a “20% off” sale?
b. What is the“ regular price” of the ring?
c. What is the operating profit if the ring happens to sell at the “regular price?”