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ACME’s manufacturing costs for sets of horseshoes include

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Magoosh GMAT Instructor
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ACME’s manufacturing costs for sets of horseshoes include [#permalink]

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New post 25 Sep 2013, 10:55
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A
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Difficulty:

  25% (medium)

Question Stats:

76% (02:55) correct 24% (02:01) wrong based on 146 sessions

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Without a calculator, solve this problem in 90 seconds.

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


For a discussion of the valuable skill of estimation on the GMAT Quant section, as well as an efficient solution to this problem, see:
http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike :-)
[Reveal] Spoiler: OA

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

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New post 26 Oct 2013, 08:15
mikemcgarry wrote:
Without a calculator, solve this problem in 90 seconds.

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


For a discussion of the valuable skill of estimation on the GMAT Quant section, as well as an efficient solution to this problem, see:
http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike :-)

Their profit was 987*(52.5-19.75) -11.450 ~1000*32 -11,500 ~ 20,000. The answer is A
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Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

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New post 05 Nov 2013, 03:18
mikemcgarry wrote:
Without a calculator, solve this problem in 90 seconds.

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


For a discussion of the valuable skill of estimation on the GMAT Quant section, as well as an efficient solution to this problem, see:
http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike :-)


Hi Mike,

I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?
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Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

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New post 05 Nov 2013, 12:40
Expert's post
ronr34 wrote:
Hi Mike,
I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?

Dear ronr34,
As with many things with numbers, you need to develop number sense. Here's a blog about it
http://magoosh.com/gmat/2012/number-sense-for-the-gmat/
Developing number sense takes time. The more you do math without any calculator, the more your intuition for numbers will develop.

When I estimate, I often try to make things as simple as possible. Numbers with only one non-zero digit are very simple ---- that's a good target for GMAT estimation. Starting with 11,450, the closest number with only one non-zero digit is 10,000. Usually, on GMAT questions, that's a fine level for estimation. It's very convenient, because even if you have to multiply, it's just one-digit arithmetic with some zeros stuck at the end. ---- If you can compensate a round-up with a round-down, that can help, but often even that is not necessary, especially if the answer choices are very far apart.

Does this make sense?
Mike :-)
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Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

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New post 07 Nov 2013, 15:02
mikemcgarry wrote:
ronr34 wrote:
Hi Mike,
I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?

Dear ronr34,
As with many things with numbers, you need to develop number sense. Here's a blog about it
http://magoosh.com/gmat/2012/number-sense-for-the-gmat/
Developing number sense takes time. The more you do math without any calculator, the more your intuition for numbers will develop.

When I estimate, I often try to make things as simple as possible. Numbers with only one non-zero digit are very simple ---- that's a good target for GMAT estimation. Starting with 11,450, the closest number with only one non-zero digit is 10,000. Usually, on GMAT questions, that's a fine level for estimation. It's very convenient, because even if you have to multiply, it's just one-digit arithmetic with some zeros stuck at the end. ---- If you can compensate a round-up with a round-down, that can help, but often even that is not necessary, especially if the answer choices are very far apart.

Does this make sense?
Mike :-)


Great.
I followed the link and others that were in the post.
but I still sometimes, when the answers are close together and there is not big split, get confused.
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Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

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New post 14 Jan 2014, 07:29
mikemcgarry wrote:
ronr34 wrote:
Hi Mike,
I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?

Dear ronr34,
As with many things with numbers, you need to develop number sense. Here's a blog about it
http://magoosh.com/gmat/2012/number-sense-for-the-gmat/
Developing number sense takes time. The more you do math without any calculator, the more your intuition for numbers will develop.

When I estimate, I often try to make things as simple as possible. Numbers with only one non-zero digit are very simple ---- that's a good target for GMAT estimation. Starting with 11,450, the closest number with only one non-zero digit is 10,000. Usually, on GMAT questions, that's a fine level for estimation. It's very convenient, because even if you have to multiply, it's just one-digit arithmetic with some zeros stuck at the end. ---- If you can compensate a round-up with a round-down, that can help, but often even that is not necessary, especially if the answer choices are very far apart.

Does this make sense?
Mike :-)


Yes mike it does make sense and that is what I usually do in this case 987 = 1000
and 52.5-19.75 is just something near 32

And then 11,450 is just near 12,000

So everything comes near 20,000

Also when estimating it is important to try to compensate rounding and also in fractions good to know the heavy division shortcut for some problems that involve raw estimates

Just my 2cents

Cheers!
J :)
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Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

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New post 31 Oct 2014, 10:08
approximations
19.75 = 20.00
52.50 = 50
987 = 1000
Initial cost = 20*1000 + 11450 = 31450
Selling = 50 * 1000 = 50000
Profit = 50000 - 31450 = 19000
close to 20k ans. A
Re: ACME’s manufacturing costs for sets of horseshoes include   [#permalink] 31 Oct 2014, 10:08
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