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A certain manufacturer produces items for which the producti
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05 Jan 2014, 13:13
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The Official Guide For GMAT® Quantitative Review, 2ND EditionA certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must the manufacturer produce and sell to earn an annual profit of $150,000 ? (A) 2,858 (B) 18,667 (C) 21,429 (D) 35,000 (E) 40,000 Problem Solving Question: 25 Category: Algebra Applied problems Page: 65 Difficulty: 600 GMAT Club is introducing a new project: The Official Guide For GMAT® Quantitative Review, 2ND Edition  Quantitative Questions ProjectEach week we'll be posting several questions from The Official Guide For GMAT® Quantitative Review, 2ND Edition and then after couple of days we'll provide Official Answer (OA) to them along with a slution. We'll be glad if you participate in development of this project: 1. Please provide your solutions to the questions; 2. Please vote for the best solutions by pressing Kudos button; 3. Please vote for the questions themselves by pressing Kudos button; 4. Please share your views on difficulty level of the questions, so that we have most precise evaluation. Thank you!
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05 Jan 2014, 13:13
SOLUTIONA certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must the manufacturer produce and sell to earn an annual profit of $150,000 ?(A) 2,858 (B) 18,667 (C) 21,429 (D) 35,000 (E) 40,000 Profit = Revenue  Cost. Let x is the number of items the manufacturer must produce and sell. Profit = 150,000; Revenue = 15x; Cost = 130,000 + 8x. 150,000 = 15x  (130,000 + 8x); 280,000 = 7x; x = 40,000. Answer: E. Similar questions to practice: marginalcostisthecostofincreasingthequantitypr109332.htmltheexpensesofahostelarepartlyfixedandpartly137287.html
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A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must the manufacturer produce and sell to earn an annual profit of $150,000 ? (A) 2,858 (B) 18,667 (C) 21,429 (D) 35,000 (E) 40,000 Sol: Let x be the number of items that must be sold to make a annual profit of $150000. Now Profit= Selling Price  Cost PriceThus we have 150000= 15x  (130000+8x)> 20000= 7x > We don't even have to caculate this value because Barring Option A all the other options are automatically ruled out. Ans is A
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Last edited by WoundedTiger on 06 Jan 2014, 02:56, edited 2 times in total.



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06 Jan 2014, 02:41
A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must the manufacturer produce and sell to earn an annual profit of $150,000 ? (A) 2,858 (B) 18,667 (C) 21,429 (D) 35,000 (E) 40,000 Let us say x items were produced Total cost = 130,000 + 8x Total Revenue = 15x For 150,000 Profit Revenue = Cost + 150,000Profit Revenue = 130,000 + 8x + 150,000 = 15x 7x = 280,000 x = 40,000 Answer E
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06 Jan 2014, 02:57
WoundedTiger wrote: A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must the manufacturer produce and sell to earn an annual profit of $150,000 ?
(A) 2,858 (B) 18,667 (C) 21,429 (D) 35,000 (E) 40,000
Sol: Let x be the number of items that must be sold to make a annual profit of $150000. Now Profit= Selling Price  Cost Price
Thus we have 150000= 15x  (130000+8x)> 20000= 7x > We don't even have to caculate this value because Barring Option A all the other options are automatically ruled out.
Ans is A God Help me......I can do better....7x=280000 and x=40000.Ans E
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Re: A certain manufacturer produces items for which the producti
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06 Jan 2014, 08:58
Bunuel wrote: The Official Guide For GMAT® Quantitative Review, 2ND EditionA certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variable costs averaging $8 per item. If the manufacturer's selling price per item is $15, how many items must the manufacturer produce and sell to earn an annual profit of $150,000 ? (A) 2,858 (B) 18,667 (C) 21,429 (D) 35,000 (E) 40,000 Difficulty level : Sub 600. The difference of Selling and variable cost is : $7. Now the seller has to make a profit of $150k on top of fixed cost of $130k , so N * 7 = $280k Now pick up the easiest option to verify, Option E) is the easiest to test and satisfies the equation beautifully. Option E)
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11 Jun 2014, 13:56
Profit for 1 Item > 158 = 7 (130,000+150,000)/7 = 40,000
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A certain manufacturer produces items for which the producti
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20 Sep 2017, 10:32
Madelaine88 wrote: A certain manufacturer produces items for which the production costs consist of annual fixed costs totaling $130,000 and variables costs averaging $8 per item. If the manufacturer’s selling price per item is $15, how many items the manufacturer produce and sell to earn an annual profit of $150,000?
(A) 2,858 (B) 18,667 (C) 21,429 (D) 35,000 (E) 40,000 I eliminated, then backsolved with a shortcut. Answers A, B, and C have numbers that are absurd. Eliminate them. If GMAT writers require calculations with those numbers in PS, I will risk being wrong over losing too much time for other questions. Between remaining answers D and E, E looks better: 40,000 is quicker in calculation. The shortcut: take three zeros off the large numbers. The calculated answer similarly will short by three zeros. Total revenue = SP * # items 15 * 40 = 600Total cost = Variable Cost + Fixed Cost Variable Cost= (cost/item * # items) Variable Cost = (8 * 40) = 320 Fixed Cost = 130 Total Cost = 320 + 130 = 450Profit = TR  TC 600  450 = 150That's a match. Answer E
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