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Updated on: 12 Sep 2013, 02:54
5
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Difficulty:

55% (hard)

Question Stats:

62% (01:00) correct 38% (00:47) wrong based on 974 sessions

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A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk? A.$40
B. $60 C.$80
D. $90 E.$100

Originally posted by udribat on 13 Oct 2008, 20:02.
Last edited by Bunuel on 12 Sep 2013, 02:54, edited 1 time in total.
Renamed the topic, edited the question and added the OA.
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Re: A furniture dealer purchased a desk for $150 and then set th [#permalink] ### Show Tags 12 Sep 2013, 02:58 1 11 udribat wrote: A furniture dealer purchased a desk for$150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?

A. $40 B.$60
C. $80 D.$90
E. $100 Similar questions to practice: a-shop-purchased-a-pair-of-sunglasses-for-120-and-was-139958.html a-photography-dealer-ordered-60-model-x-cameras-to-be-sold-132077.html a-merchant-purchased-a-jacket-for-60-and-then-determined-104375.html a-retailer-bought-a-shirt-at-wholesale-and-marked-it-up-130759.html a-dress-is-marked-up-16-2-3-to-a-final-price-of-140-what-155046.html _________________ ##### Most Helpful Community Reply Senior Manager Joined: 26 Jan 2008 Posts: 260 Re: Simple but still having trouble :( [#permalink] ### Show Tags 13 Oct 2008, 20:50 9 1 udribat wrote: A furniture dealer purchased a desk for$150 and then set the selling price to the purchase price plus markup that was 40 percent of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?

1) $40 2)$60
3) $80 4)$90

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Updated on: 26 Jul 2012, 23:26
1
A furniture dealer purchased a desk for $150 and then set the selling price equal to purchasing price plus a markup that was 40% of selling price. If the dealer sold the desk at selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk? A.$40
B. $60 C.$80
D. $90 E.$100
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get what u like or like what u get

Originally posted by dheerajv on 26 Jul 2012, 10:53.
Last edited by Bunuel on 26 Jul 2012, 23:26, edited 1 time in total.
Edited the question.
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26 Jul 2012, 11:18
let my selling price be 100x
then according to the prompt
150+40x=100x
this means 100x=SP=250
So profit is 100
Option E is correct
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26 Jul 2012, 18:10
Here's how I did it mentally:
the markup is 40% of the total price, the cost of 150 is 60 percent of the cost
hence the markup is two thirds of 150 = 50*2 =100

That's probably more like a 600-700 question I think

Hope it helps
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19 Oct 2014, 15:57
hi all.

I love math but hate GMAT math.
Anyway, I'm getting confused with the terminology in this question. If the markup is 40% is that not the same thing as the profit? ie. isn't the markup the difference between the selling price and the cost?

I might be missing something basic here. With this thinking, I just had selling price = to 140% of cost and got the answer wrong. I've seen how people solve it but I just don't understand the business or visual part of it.... HELP!

PS - Why am I asking these types of questions 2 weeks before my exam
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21 Mar 2015, 18:57
VeritasPrepKarishma wrote:
angelfire213 wrote:
hi all.

I love math but hate GMAT math.
Anyway, I'm getting confused with the terminology in this question. If the markup is 40% is that not the same thing as the profit? ie. isn't the markup the difference between the selling price and the cost?

I might be missing something basic here. With this thinking, I just had selling price = to 140% of cost and got the answer wrong. I've seen how people solve it but I just don't understand the business or visual part of it.... HELP!

PS - Why am I asking these types of questions 2 weeks before my exam

No, mark up is the difference between cost price and list price (or tag price or marked price). The list price may be different from selling price if the store offers a discount.

Look at it from the store's perspective. It buys a shirt at $100 and marks it up by 50% i.e. writes$150 as the list price on the shirt. The shirt doesn't sell for a month after which the store has a sale of 10% on everything. Someone buys the shirt during the sale at this 10% discount i.e. 150 - 10% of 150 = $135. So the selling price of the shirt is$135. So here, mark up was 50% but profit was 35%.

Anyway, in this question, there is no discount but the mark up is given as 40% of the selling price. So it is not 40% of $150 but instead, 40% of Selling price which is obtained by adding mark up to$150.

So if selling price is S,
150 + 40% of S = S
S = 250

Profit = 100 which is calculated on cost price in % terms. So 100/150 * 100 = 66.67% is profit.
Note that usually mark up is also calculated on cost price and hence mark up percentage would be 100/150 = 66.7% - i.e. same as profit% since there is no discount in this case. This question just gives you mark up on selling price and hence you need to do suitable modifications.

wow, thanks for the explanation on the list price bit. i guess that was the missing link, i too was having a hard time trying to understand why there's a gap in the understanding. the list price part fill in the void nicely!
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Re: A furniture dealer purchased a desk for $150 and then set th [#permalink] ### Show Tags 14 Jul 2015, 18:35 CP =$150.
SP = $150 + 40%(SP) So, (0.6) (SP) =$150

SP = $150/0.6 =$250.

So, GP = SP-CP = $250-$150 = $100. Ans (E). _________________ I used to think the brain was the most important organ. Then I thought, look what’s telling me that. Current Student Joined: 23 Feb 2015 Posts: 169 Schools: Duke '19 (M) Re: A furniture dealer purchased a desk for$150 and then set th [#permalink]

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27 Nov 2015, 09:25
Purchase price = $150 Selling Price = SP SP = 150 + 0.4SP 0.6SP = 150 SP = 250 GP = 250-150 GP =$100

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04 Feb 2017, 03:24
udribat wrote:
A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk? A.$40
B. $60 C.$80
D. $90 E.$100

PP + 40%SP = SP
PP + 4/10 * SP = SP
6SP = 1500
SP =25o
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24 Feb 2017, 09:53
A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk? A.$40
B. $60 C.$80
D. $90 E.$100

my solution:

$$150(1+\frac{x}{100})=S$$ S is selling price. X is the markup.

also $$x=\frac{4}{10}S$$

substitute: $$150(1+\frac{4s}{10/100})=S$$
$$150+\frac{6s}{10}=S$$
$$1500+6S=10S$$

Selling price = 375.

WHY is this wrong????? The logic seems perfect, yet its wrong, omg what is going on here.....
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Re: A furniture dealer purchased a desk for $150 and then set th [#permalink] ### Show Tags 24 Feb 2017, 15:39 2 iliavko wrote: A furniture dealer purchased a desk for$150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?

A. $40 B.$60
C. $80 D.$90
E. $100 my solution: $$150(1+\frac{x}{100})=S$$ S is selling price. X is the markup. also $$x=\frac{4}{10}S$$ substitute: $$150(1+\frac{4s}{10/100})=S$$ $$150+\frac{6s}{10}=S$$ $$1500+6S=10S$$ Selling price = 375. WHY is this wrong????? The logic seems perfect, yet its wrong, omg what is going on here..... Your solution would be correct if the 'markup' were given as a percentage markup (i.e. if it said something like 'a markup of 40%' or 'a 40% markup'.) However, in this problem, you're given the dollar amount of the markup. Sure, they describe it to you in terms of percents, but '40 percent of the selling price' refers to a dollar amount, not a percentage value. In your equation, you're dividing it by 100, which indicates that you thought of it as a percentage markup. What you actually want to start with is: selling price = 150 + 4/10(selling price) That is, the selling price starts at 150, and then is increased by a dollar amount equal to 40 percent of the selling price. _________________ Chelsey Cooley | Manhattan Prep Instructor | Seattle and Online My upcoming GMAT trial classes | GMAT blog archive Intern Joined: 24 Sep 2016 Posts: 36 Location: United States (CT) Concentration: Finance, International Business GPA: 3.81 WE: Analyst (Venture Capital) Re: A furniture dealer purchased a desk for$150 and then set th [#permalink]

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26 Feb 2017, 10:52
Very simple to understand forget about the algebra it will only confuse you. The desk cost !50 dollars, and the dealer wanted to set the selling price equal to an an amount. Now that amount included a markup that was 40% of the selling price. So 40% of 150 is 60 however he needs to make a profit. So he has to increase the price to a higher amount to obtain the 40% markup. In this case the markup would be $90 dollars so the dealer must raise the price to a certain amount in this case to$240 because 60% of the original 150 cost would add the amount equivalent to the markup and gross profit!
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Re: A furniture dealer purchased a desk for $150 and then set th [#permalink] ### Show Tags 01 Jan 2018, 11:40 Here is how I do it. Selling Price = S S = 150 + .40S S = 250 Profit = 250 - 150 = 100 I hope it's right. Re: A furniture dealer purchased a desk for$150 and then set th   [#permalink] 01 Jan 2018, 11:40
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