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# A store sold A at a price three times as much as B. The

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Senior Manager
Joined: 01 May 2004
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A store sold A at a price three times as much as B. The [#permalink]  30 Jun 2004, 17:02
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A store sold A at a price three times as much as B. The gross profit of A is 80% of the price that the store paid for A. The gross profit for B is 20% of the price that the store paid for B. what percent is the total gross profit of the total amount that the store paid for both A and B?
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A = 3B
Total cost: B + 3B = 4B
gross profit: .8*3B + .2*B
gross profit/total cost = [.8*3B + .2*B] / 4B
= 2.4B + .2B / 4B
= 2.6B / 4B = .65
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Paul

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I got a slightly different answer:

A B
Sale 100 20
CGS 50 20

GP 40 4

GP/CGS = 44/70 = 22/35= 62.8%

Any thoughts?
Senior Manager
Joined: 07 Oct 2003
Posts: 358
Location: Manhattan
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Kudos [?]: 9 [0], given: 0

it seems like there's a flaw in my solution, I just can't quite put my finger on it.
Senior Manager
Joined: 01 May 2004
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I've got 65% too, so I wanted just to check with you guys
Senior Manager
Joined: 21 Mar 2004
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Paul wrote:
A = 3B
Total cost: B + 3B = 4B
gross profit: .8*3B + .2*B
gross profit/total cost = [.8*3B + .2*B] / 4B
= 2.4B + .2B / 4B
= 2.6B / 4B = .65

I think the selling price(SP) of A is 3 times of B ( and not the cost price)

So the gross profit should be calculated on Cost price(CP).

Let SP of B = 100.
SP of A = 300

CP of A = 300/1.8
CP of B = 100/1.2

total cost = 300/1.8 + 100/1.2

Total gross profit = (300 - 300/1.8) + (100 - 100/1.2 )

% profit = (total gross profit / total cost )*100= 60%

- ash.
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ash
________________________
I'm crossing the bridge.........

GMAT Club Legend
Joined: 15 Dec 2003
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Quote:
CP of A = 300/1.8
CP of B = 100/1.2

Can you explain how you derived this? Also, are you not taking data from gross profit (profit/cost) and applied it to sales price?
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Paul

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Joined: 21 Mar 2004
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Kudos [?]: 21 [0], given: 0

If CP is x and profit is 80% on CP , profit = .8x

the SP would be x+.8x = 1.8x

So CP in terms of SP = SP/1.8 = 300/1.8

Similary

for B , CP = 100/1.2
as profit is 20%.

hope that clears things.

- ash
_________________

ash
________________________
I'm crossing the bridge.........

GMAT Club Legend
Joined: 15 Dec 2003
Posts: 4309
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Kudos [?]: 236 [0], given: 0

lastochka wrote:
I got a slightly different answer:

A B
Sale 100 20
CGS 50 20

GP 40 4

GP/CGS = 44/70 = 22/35= 62.8%

Any thoughts?

Hmmm, given that B sales price is 20, shouldn't sales price of A be 60$? Quote: A store sold A at a price three times as much as B Also, how did you get CGS(cost of goods sold) 50$ for A and 20\$ for B? Am I missing something here?
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Best Regards,

Paul

GMAT Club Legend
Joined: 15 Dec 2003
Posts: 4309
Followers: 29

Kudos [?]: 236 [0], given: 0

ashkg wrote:
If CP is x and profit is 80% on CP , profit = .8x

the SP would be x+.8x = 1.8x

So CP in terms of SP = SP/1.8 = 300/1.8

Similary

for B , CP = 100/1.2
as profit is 20%.

hope that clears things.

- ash

:nice ashk. Are you an accountant? Well, after your explanation, I declare myself birdbrain
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Best Regards,

Paul

Senior Manager
Joined: 21 Mar 2004
Posts: 444
Location: Cary,NC
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Kudos [?]: 21 [0], given: 0

Hi Paul,

You have prompted me to post an introduction of myself
Thanks for that, or I would have done that after my exam.

http://www.gmatclub.com/phpbb/viewtopic ... 2114#42114

take care,
ash.
_________________

ash
________________________
I'm crossing the bridge.........

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# A store sold A at a price three times as much as B. The

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