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# Cost and profit

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Intern
Joined: 17 May 2011
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19 May 2011, 20:49
00:00

Difficulty:

45% (medium)

Question Stats:

63% (02:59) correct 38% (01:30) wrong based on 8 sessions

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A whole-seller allows a discount of 20% on the list price to a retailer. The retailer sells at 5% discount on the list price. If the customer paid $38 for an article, what profit is made by the retailer ? a.$10
b. $8 c.$6
d. $12 How to do this ? [Reveal] Spoiler: OA Director Status: Matriculating Affiliations: Chicago Booth Class of 2015 Joined: 03 Feb 2011 Posts: 920 Followers: 13 Kudos [?]: 290 [0], given: 123 Re: Cost and profit [#permalink] ### Show Tags 19 May 2011, 21:01 Let the list price be x Cp to retailer = 0.8 x Sp retailer = 0.95 x Profit = 0.15 x We know that customer paid$38. hence 0.95x = 38 and x = 40

Profit = 0.15 * 40 = $6 ramkryp wrote: A whole-seller allows a discount of 20% on the list price to a retailer. The retailer sells at 5% discount on the list price. If the customer paid$38 for an article, what profit is made by the retailer ?
a. $10 b.$8
c. $6 d.$12

How to do this ?
Intern
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19 May 2011, 21:17
Thanks
VP
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19 May 2011, 21:18
retailer's SP = 0.95 LP = 38
LP = 40

retailer's CP = 0.8 LP = discounted price from the whole sailer = 32

Profit = 0.95 LP - 0.8 LP = 38 - 32 = 6
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Director
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21 May 2011, 14:32
whole sale person's selling price = retailers cost price = (80/100)(LP)

retailers selling price = (95/100)LP

=> profit = (15/100)*LP equation1

also given that (95/100)LP = 38 eqution2

substituting 2 in 1 we have
profit = 6
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24 May 2011, 09:34
The customer pays $95 when the list price is$ 100

Therefore the list price of the article when the customer pays $38 = 100 * 38/95 =$ 40

The retailer got it from the wholesaler after 20% discount

So the cost price of the article to the retailer = 0.8 * 40 = $32 Hence profit = SP - CP =$6
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25 May 2011, 07:07
Step 1:

Let the list price be x

So, the retailer sells the product @ 5% discount on the list price
The selling price is 38

=> 0.95x = 38
=> x=38/0.95=40

Step 2:

But the wholesaler sells the product to the retailer @ 20% discount on the list price
So the cost price to the retailer is:

0.8*40=32

Step 3:
So, the profit to the retailer is SP-CP = 38-32 = 6

Option (C) is the right answer.
Re: Cost and profit   [#permalink] 25 May 2011, 07:07
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