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22 Mar 2018, 11:27
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25% (medium)

Question Stats:

80% (02:29) correct 20% (02:41) wrong based on 63 sessions

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A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally,$20 goes into the finishing and packaging of each machine tool. If a consignment of 50 batches was sold for $1000000, what is the percentage profit earned by the company on this consignment? A. 30% B. 300% C. 3000% D. 60% E. 600% Source: Experts Global _________________ You've got what it takes, but it will take everything you've got Senior SC Moderator Joined: 22 May 2016 Posts: 3670 A fixed cost of$1000 is incurred in producing a batch of 200 machine  [#permalink]

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22 Mar 2018, 14:07
pushpitkc wrote:
A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally,$20 goes into the finishing and packaging of each machine tool. If a consignment of 50 batches was sold for $1000000, what is the percentage profit earned by the company on this consignment? A. 30% B. 300% C. 3000% D. 60% E. 600% Source: Experts Global Percentage profit: $$\frac{(TR-TC)}{TC}*100$$ Total Cost (TC) 50($1000) + ($20)(50*200) =$250,000

Percentage profit:
$$\frac{1,000,000-250,000}{250,000}*100$$=

$$(\frac{750,000}{250,000}*100)= 3 * 100= 300$$
%

Similar formula, per batch cost first

Percentage profit =
$$\frac{(TR-TC)}{TC}*100$$ <-> $$\frac{GrossProfit}{TC}*100$$

1) Cost price of 1 batch (= 200 tools)?
$1,000 fixed +$20/tool (* 200 tools)
$1,000 + ($20)(200)
$1,000 +$4,000 = $5,000 cost price per batch 2) Total cost (TC) of 50 batches? (50 *$5,000) = $250,000 3) TR, given =$1,000,000

4) Gross profit = (TR - TC)
($1,000,000 -$250,000) = $750,000 5) Percentage profit =$$\frac{GrossProfit}{TC}*100=$$ $$(\frac{750,000}{250,000}*100)= 3 * 100= 300$$ % Answer B _________________ SC Butler has resumed! Get two SC questions to practice, whose links you can find by date, here. Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has -- Margaret Mead Intern Joined: 24 Jan 2018 Posts: 14 Re: A fixed cost of$1000 is incurred in producing a batch of 200 machine  [#permalink]

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22 Mar 2018, 15:45
1
I found it easiest to figure out the total cost of producing a single batch (1000+4000), then figure out the revenue for each batch (20000), so profit is 15000 which is 3 times 5000 which works out to 300%
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Joined: 22 May 2016
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23 Mar 2018, 16:24
1
generis wrote:
hawesg wrote:
I found it easiest to figure out the total cost of producing a single batch (1000+4000), then figure out the revenue for each batch (20000), so profit is 15000 which is 3 times 5000 which works out to 300%

hawesg , Creative solution. +1
And welcome to GMAT club! (I'm late by a few weeks. )

To be fair I started writing it out the long way before I realized it wasn't required.
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Joined: 30 Dec 2016
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A fixed cost of $1000 is incurred in producing a batch of 200 machine [#permalink] ### Show Tags 03 Apr 2018, 05:12 A fixed cost of$1000 is incurred in producing a batch of 200 machine tools. Additionally, 20$goes into finishing and packaging of each machine tool. If a consignment of 50 batches sold for$1,000,000. What is the percentage of profit earned by the company on this consignment?

a) 30%
b) 300%
c) 3000%
d) 60%
e) 600%
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Joined: 25 Feb 2013
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Re: A fixed cost of $1000 is incurred in producing a batch of 200 machine [#permalink] ### Show Tags 03 Apr 2018, 08:09 1 sandysilva wrote: A fixed cost of$1000 is incurred in producing a batch of 200 machine tools. Additionally, 20$goes into finishing and packaging of each machine tool. If a consignment of 50 batches sold for$1,000,000. What is the percentage of profit earned by the company on this consignment?

a) 30%
b) 300%
c) 3000%
d) 60%
e) 600%

Hi,

The question is already posted in the below link. Kindly follow the rules of posting and search before you post. Thanks

https://gmatclub.com/forum/a-fixed-cost ... fl=similar