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# A magazine costs $1.00 per copy to produce. If$20,000 was taken in

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Math Expert
Joined: 02 Sep 2009
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A magazine costs $1.00 per copy to produce. If$20,000 was taken in  [#permalink]

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22 Feb 2018, 20:43
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Difficulty:

35% (medium)

Question Stats:

75% (01:52) correct 25% (02:02) wrong based on 26 sessions

A magazine costs $1.00 per copy to produce. If$20,000 was taken in for advertising in the magazine, how many copies at 75 cents per copy must be sold to make a profit of exactly $10,000? (A) 10,000 (B) 20,000 (C) 25,000 (D) 35,000 (E) 40,000 _________________ Senior PS Moderator Joined: 26 Feb 2016 Posts: 3360 Location: India GPA: 3.12 A magazine costs$1.00 per copy to produce. If $20,000 was taken in [#permalink] ### Show Tags 22 Feb 2018, 21:58 Bunuel wrote: A magazine costs$1.00 per copy to produce. If $20,000 was taken in for advertising in the magazine, how many copies at 75 cents per copy must be sold to make a profit of exactly$10,000?

(A) 10,000

(B) 20,000

(C) 25,000

(D) 35,000

(E) 40,000

Since the cost of producing 1 magazine is $1, to produce x magazine, we would need$x.

Part of this cost was recovered by advertising in the magazine, which was $20000 We need to make a profit of$10000, selling at $0.75 per magazine. $$(0.75x + 20000) - x = 10000$$ -> $$0.25x = 10000$$ -> $$x = 40000$$ Therefore, we would need to produce 40000 magazines to realize a profit of$10000(Option E)

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A magazine costs $1.00 per copy to produce. If$20,000 was taken in  [#permalink]

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24 Feb 2018, 13:18
Bunuel wrote:
A magazine costs $1.00 per copy to produce. If$20,000 was taken in for advertising in the magazine, how many copies at 75 cents per copy must be sold to make a profit of exactly $10,000? (A) 10,000 (B) 20,000 (C) 25,000 (D) 35,000 (E) 40,000 I think pushpitkc 's solution might be better, but if you can't "see" the equation, work backwards. The magazine has collected$20,000 for advertising. Call that "cost offset."

Cost to produce: (25,000 * $1) =$25,000
Cost offset: -$20,000 TOTAL COST: ($25,000 - $20,000) =$5,000
TOTAL REVENUE: (25,000 * $0.75) =$18,750
PROFIT =(TR-TC) = ($18,750 -$5,000) = $13,750 Too high. We have too FEW copies. Why? Cost to produce ($1) is higher than sell price ($0.75). (The$20K offset makes this possible.)
To decrease profit (from $13,750 to$10,000), we must increase costs.

That can be done only by producing more copies. Eliminate A and B.

Try Answer E because it is "rounder" than D.

40,000 copies?
Cost to produce: (40,000 * $1) =$40,000
Cost offset: $20,000 TOTAL COST:($40,000 - $20,000) =$20,000
TOTAL REVENUE: (40,000 * $0.75) =$30,000