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ACME’s manufacturing costs for sets of horseshoes [#permalink]
14 Feb 2013, 11:19

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Question Stats:

80% (02:49) correct
20% (01:59) wrong based on 61 sessions

ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit? (A) $20,874.25 (B) $30,943.25 (C) $41,308.50 (D) $51,817.50 (E) $53,624.25

Unless you're Johannes Kepler or Will Hunting, you probably would not be able to do that exact calculation in your head, and of course you get no calculator on the GMAT. With estimation, though, this is a remarkably simple question. For more on the power of estimation on the GMAT, as well as an elegant solution to this question, see: http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Experts, what wisdom and specific tips would you like to share about estimation on the GMAT Quantitative section?

Re: ACME’s manufacturing costs for sets of horseshoes [#permalink]
12 Aug 2014, 18:35

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Re: ACME’s manufacturing costs for sets of horseshoes [#permalink]
13 Aug 2014, 21:45

mikemcgarry wrote:

ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit? (A) $20,874.25 (B) $30,943.25 (C) $41,308.50 (D) $51,817.50 (E) $53,624.25

Unless you're Johannes Kepler or Will Hunting, you probably would not be able to do that exact calculation in your head, and of course you get no calculator on the GMAT. With estimation, though, this is a remarkably simple question. For more on the power of estimation on the GMAT, as well as an elegant solution to this question, see: http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Experts, what wisdom and specific tips would you like to share about estimation on the GMAT Quantitative section?

Mike

The OA in this problem have a great variation; so we can use approximation

19.75 \approx {20}

52.50 \approx {50}

987 \approx {1000}

Total Cost Price= 11450 + 20*1000 \approx{31000}

Total Sell Price = 1000*50 \approx {50000}

Profit \approx {20000}

Answer = A _________________

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Re: ACME’s manufacturing costs for sets of horseshoes
[#permalink]
13 Aug 2014, 21:45