ACME’s manufacturing costs for sets of horseshoes : GMAT Problem Solving (PS)
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# ACME’s manufacturing costs for sets of horseshoes

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ACME’s manufacturing costs for sets of horseshoes [#permalink]

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14 Feb 2013, 11:19
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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
[Reveal] Spoiler: OA

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Re: ACME’s manufacturing costs for sets of horseshoes [#permalink]

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14 Feb 2013, 12:12
its A

since options are not so close we can solve this by uniting calculation and guessing

total sales will be bit lower than 52500

from that initial outlay will get deducted 11500 so we left with 41000

variable cost say 20 X 1000 = 20000 will be deducted so finally we left with 21000

since we have considered the price greater than it actually is, the correct answer will certainly not cross the threshold of 21000.

@Mike Sir

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Abhijit
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Re: ACME’s manufacturing costs for sets of horseshoes [#permalink]

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

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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 $$= 1000*50 \approx {50000}$$

$$Profit \approx {20000}$$

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Re: ACME’s manufacturing costs for sets of horseshoes [#permalink]

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28 May 2016, 10:53
Hello from the GMAT Club BumpBot!

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Re: ACME’s manufacturing costs for sets of horseshoes   [#permalink] 28 May 2016, 10:53
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