GMAT Question of the Day: Daily via email | Daily via Instagram New to GMAT Club? Watch this Video

 It is currently 23 Jan 2020, 14:37

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# A company produces school bags. The cost for producing the first 1,000

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
TAGS:

### Hide Tags

Math Expert
Joined: 02 Sep 2009
Posts: 60627
A company produces school bags. The cost for producing the first 1,000  [#permalink]

### Show Tags

05 Nov 2019, 01:39
00:00

Difficulty:

35% (medium)

Question Stats:

73% (02:08) correct 28% (02:21) wrong based on 80 sessions

A company produces school bags. The cost for producing the first 1,000 bags of a particular design, owing to initial expenses, turns out to be $30 per bag. Thereafter, the cost reduces to$10 per bag. If the company produced 5,000 bags of a certain design and sold them all at an average price of $20 per bag, which of the following will represent the best approximation for the percentage profit earned by the company on the expenses incurred in producing these bags? A. 10% B. 20% C. 30% D. 40% E. 50% Are You Up For the Challenge: 700 Level Questions _________________ Director Joined: 09 Aug 2017 Posts: 678 Re: A company produces school bags. The cost for producing the first 1,000 [#permalink] ### Show Tags 05 Nov 2019, 05:17 CP= (30*1000)+10(4000) = 70000 SP= 20*5000= 10000 Profit % = 3/7*100~43% D is closest and answer. VP Joined: 19 Oct 2018 Posts: 1294 Location: India Re: A company produces school bags. The cost for producing the first 1,000 [#permalink] ### Show Tags 05 Nov 2019, 06:05 Avg cost price of 5000 bags =$$\frac{1*30+4*10}{5}$$= 14 Avg SP of 5000 bags= 20 best approximation for the percentage profit earned by the company on the expenses incurred in producing these bags= $$\frac{20-14}{14} *100$$=43% Bunuel wrote: A company produces school bags. The cost for producing the first 1,000 bags of a particular design, owing to initial expenses, turns out to be$30 per bag. Thereafter, the cost reduces to $10 per bag. If the company produced 5,000 bags of a certain design and sold them all at an average price of$20 per bag, which of the following will represent the best approximation for the percentage profit earned by the company on the expenses incurred in producing these bags?

A. 10%
B. 20%
C. 30%
D. 40%
E. 50%

Are You Up For the Challenge: 700 Level Questions
GMAT Club Legend
Joined: 18 Aug 2017
Posts: 5723
Location: India
Concentration: Sustainability, Marketing
GPA: 4
WE: Marketing (Energy and Utilities)
Re: A company produces school bags. The cost for producing the first 1,000  [#permalink]

### Show Tags

05 Nov 2019, 06:58
CP = 3*10^4+4*10^4 ; 7*10^4
SP = 10^5
% profit = 10^5-7*10^4/ 7*10^4 ; 3/7 ; ~40%
IMO D

Bunuel wrote:
A company produces school bags. The cost for producing the first 1,000 bags of a particular design, owing to initial expenses, turns out to be $30 per bag. Thereafter, the cost reduces to$10 per bag. If the company produced 5,000 bags of a certain design and sold them all at an average price of $20 per bag, which of the following will represent the best approximation for the percentage profit earned by the company on the expenses incurred in producing these bags? A. 10% B. 20% C. 30% D. 40% E. 50% Are You Up For the Challenge: 700 Level Questions Board of Directors Status: QA & VA Forum Moderator Joined: 11 Jun 2011 Posts: 4860 Location: India GPA: 3.5 WE: Business Development (Commercial Banking) Re: A company produces school bags. The cost for producing the first 1,000 [#permalink] ### Show Tags 05 Nov 2019, 07:23 Bunuel wrote: A company produces school bags. The cost for producing the first 1,000 bags of a particular design, owing to initial expenses, turns out to be$30 per bag. Thereafter, the cost reduces to $10 per bag. If the company produced 5,000 bags of a certain design and sold them all at an average price of$20 per bag, which of the following will represent the best approximation for the percentage profit earned by the company on the expenses incurred in producing these bags?

A. 10%
B. 20%
C. 30%
D. 40%
E. 50%

Are You Up For the Challenge: 700 Level Questions

CP = 1000*30 + 4000*10 => 30000 + 40000 = 70000

SP = 5000*20 = 100000

So, Profit is 30000 ; Profit % is 3/7*100 ~ 40%, Answer must be (D)
_________________
Thanks and Regards

Abhishek....

PLEASE FOLLOW THE RULES FOR POSTING IN QA AND VA FORUM AND USE SEARCH FUNCTION BEFORE POSTING NEW QUESTIONS

How to use Search Function in GMAT Club | Rules for Posting in QA forum | Writing Mathematical Formulas |Rules for Posting in VA forum | Request Expert's Reply ( VA Forum Only )
Target Test Prep Representative
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 9117
Location: United States (CA)
Re: A company produces school bags. The cost for producing the first 1,000  [#permalink]

### Show Tags

11 Nov 2019, 17:28
1
Bunuel wrote:
A company produces school bags. The cost for producing the first 1,000 bags of a particular design, owing to initial expenses, turns out to be $30 per bag. Thereafter, the cost reduces to$10 per bag. If the company produced 5,000 bags of a certain design and sold them all at an average price of $20 per bag, which of the following will represent the best approximation for the percentage profit earned by the company on the expenses incurred in producing these bags? A. 10% B. 20% C. 30% D. 40% E. 50% Are You Up For the Challenge: 700 Level Questions Since profit = revenue - cost, the profit is: 5000 x 20 - (1000 x 30 + 4000 x 10) 100,000 - (30,000 + 40,000) 100,000 - 70,000$30,000

Notice that the cost (or expenses) is \$70,000; so the profit is 30,000/70,000 = 3/7 ≈ 40% of the expenses.

Answer: D
_________________

# Scott Woodbury-Stewart

Founder and CEO

Scott@TargetTestPrep.com
181 Reviews

5-star rated online GMAT quant
self study course

See why Target Test Prep is the top rated GMAT quant course on GMAT Club. Read Our Reviews

If you find one of my posts helpful, please take a moment to click on the "Kudos" button.

Re: A company produces school bags. The cost for producing the first 1,000   [#permalink] 11 Nov 2019, 17:28
Display posts from previous: Sort by

# A company produces school bags. The cost for producing the first 1,000

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne