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# A certain manufacturer produces items for which the producti

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A certain manufacturer produces items for which the producti [#permalink]

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05 Jan 2014, 13:13
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15% (low)

Question Stats:

74% (02:35) correct 26% (01:58) wrong based on 428 sessions

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The Official Guide For GMAT® Quantitative Review, 2ND Edition

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

Problem Solving
Question: 25
Category: Algebra Applied problems
Page: 65
Difficulty: 600

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Re: A certain manufacturer produces items for which the producti [#permalink]

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05 Jan 2014, 13:13
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SOLUTION

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

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.

Similar questions to practice:
marginal-cost-is-the-cost-of-increasing-the-quantity-pr-109332.html
the-expenses-of-a-hostel-are-partly-fixed-and-partly-137287.html
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Re: A certain manufacturer produces items for which the producti [#permalink]

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05 Jan 2014, 21:01
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 _________________ “If you can't fly then run, if you can't run then walk, if you can't walk then crawl, but whatever you do you have to keep moving forward.” Last edited by WoundedTiger on 06 Jan 2014, 02:56, edited 2 times in total. Manager Joined: 20 Dec 2013 Posts: 132 Re: A certain manufacturer produces items for which the producti [#permalink] ### Show Tags 06 Jan 2014, 02:41 3 This post received KUDOS 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 + 150,000 Profit Revenue = 130,000 + 8x + 150,000 = 15x 7x = 280,000 x = 40,000 Answer E _________________ 76000 Subscribers, 7 million minutes of learning delivered and 5.6 million video views Perfect Scores http://perfectscores.org http://www.youtube.com/perfectscores Director Joined: 25 Apr 2012 Posts: 727 Location: India GPA: 3.21 WE: Business Development (Other) Re: A certain manufacturer produces items for which the producti [#permalink] ### Show Tags 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 [#permalink]

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06 Jan 2014, 08:58
3
KUDOS
Bunuel wrote:
The Official Guide For GMAT® Quantitative Review, 2ND Edition

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

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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Joined: 02 Sep 2009
Posts: 39626
Re: A certain manufacturer produces items for which the producti [#permalink]

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29 Apr 2014, 01:38
SOLUTION

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

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.

Similar questions to practice:
marginal-cost-is-the-cost-of-increasing-the-quantity-pr-109332.html
the-expenses-of-a-hostel-are-partly-fixed-and-partly-137287.html
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Re: A certain manufacturer produces items for which the producti [#permalink]

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11 Jun 2014, 13:56
Profit for 1 Item --> 15-8 = 7
(130,000+150,000)/7 = 40,000
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Re: A certain manufacturer produces items for which the producti [#permalink]

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12 Jul 2015, 01:50
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Re: A certain manufacturer produces items for which the producti [#permalink]

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23 Jul 2016, 04:30
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: A certain manufacturer produces items for which the producti   [#permalink] 23 Jul 2016, 04:30
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