SajjadAhmad wrote:

A department store receives a shipment of 1,000 shirts, for which it pays $9,000. The store sells the shirts at a price 80 percent above cost for one month, after which it reduces the price of the shirts to 20 percent above cost. The store sells 75 percent of the shirts during the first month and 50 percent of the remaining shirts afterward. How much gross income did sales of the shirts generate?

(A) $10,000

(B) $10,800

(C) $12,150

(D) $13,500

(E) $16,200

We are given that a department store receives a shipment of 1,000 shirts, for which it pays $9,000. Thus, the cost per shirt is 9 dollars per shirt.

Since the store sells the shirts at a price 80 percent above cost for one month, the selling price for that month is 1.8 x 9 = $16.20. Since 75 percent of the shirts or 0.75 x 1,000 = 750 shirts are sold during this month, the revenue earned is 750 x 16.2 = $12,150.

After that month, 50% of the remaining shirts or 0.5 x 250 = 125 shirts are sold at a cost of 1.2 x 9 = $10.80. The revenue earned from the sale of these shirts is 125 x 10.8 = $1,350.

Thus, the gross income earned was $12,150 + $1,350 = $13,500.

Answer: D

_________________

Scott Woodbury-Stewart

Founder and CEO

GMAT Quant Self-Study Course

500+ lessons 3000+ practice problems 800+ HD solutions