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The total cost for Company X to produce a batch of tools is [#permalink]
25 Feb 2007, 20:50

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Difficulty:

5% (low)

Question Stats:

88% (02:20) correct
12% (01:03) wrong based on 251 sessions

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is

(A) $3.00 (B) $3.75 (C) $4.50 (D) $5.00 (E) $5.50

I keep getting an answer different from OA, and I know I must be missing something simple

Re: The total cost for Company X to produce a batch of tools is [#permalink]
07 Apr 2012, 12:07

3

This post received KUDOS

Expert's post

mymbadreamz wrote:

Can someone explain this please? thanks.

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is

(A) $3.00 (B) $3.75 (C) $4.50 (D) $5.00 (E) $5.50

The total production cost of 20,000 tools is $10,000 + $3*20,000 = $70,000; The total income from sales of 20,000 tools is $8*20,000 = $160,000;

The gross profit earned is $160,000 - $70,000 = $90,000; The gross profit per tool is $90,000/20,000 = $4.50.

Re: The total cost for Company X [#permalink]
06 May 2012, 23:31

Expert's post

sravanth wrote:

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is

(A) $3.00 (B) $3.75 (C) $4.50 (D) $5.00 (E) $5.50

Merging similar topics. Please ask if anything remains unclear. _________________

Re: The total cost for Company X to produce a batch of tools is [#permalink]
21 Jun 2012, 00:53

1

This post received KUDOS

TC = 10,000 + 3x

TR = 8x

Profit = 8x - 10000 - 3x = 5x - 10000

when x = 20000, Profit = 90000

Profit per x = 90000/20000 = 4.5

terp26 wrote:

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is

(A) $3.00 (B) $3.75 (C) $4.50 (D) $5.00 (E) $5.50

I keep getting an answer different from OA, and I know I must be missing something simple

Re: The total cost for Company X to produce a batch of tools is [#permalink]
10 Jan 2014, 00:46

Hello from the GMAT Club BumpBot!

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Re: The total cost for Company X to produce a batch of tools is [#permalink]
10 Jan 2014, 00:50

terp26 wrote:

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is

(A) $3.00 (B) $3.75 (C) $4.50 (D) $5.00 (E) $5.50

I keep getting an answer different from OA, and I know I must be missing something simple

Re: The total cost for Company X to produce a batch of tools is [#permalink]
11 Sep 2014, 05:43

terp26 wrote:

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is

(A) $3.00 (B) $3.75 (C) $4.50 (D) $5.00 (E) $5.50

I keep getting an answer different from OA, and I know I must be missing something simple

Re: The total cost for Company X to produce a batch of tools is [#permalink]
11 Sep 2014, 07:02

This problem is simple but was hard for me at first. The way I ended up with a solution was seeing that each tool made $5 each and the 10,000 cost of production spread over 20,000 tools meant each tool had an additional cost of .50 making individual profit 4.50 per tool.

gmatclubot

Re: The total cost for Company X to produce a batch of tools is
[#permalink]
11 Sep 2014, 07:02