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A manufacturer’s gross profit on an item was 20 percent of the cost of

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A manufacturer’s gross profit on an item was 20 percent of the cost of  [#permalink]

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New post 24 Sep 2018, 04:46
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A manufacturer’s gross profit on an item was 20 percent of the cost of the item. If the manufacturer increased the selling price of the item from $60 to $65, while kept the cost of the item same, then the manufacturer’s profit on the item after the price increase was what percent of the cost of the item?

(A) 12%
(B) 15%
(C) 20%
(D) 24%
(E) 30%

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Re: A manufacturer’s gross profit on an item was 20 percent of the cost of  [#permalink]

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New post 24 Sep 2018, 11:12
Bunuel wrote:
A manufacturer’s gross profit on an item was 20 percent of the cost of the item. If the manufacturer increased the selling price of the item from $60 to $65, while kept the cost of the item same, then the manufacturer’s profit on the item after the price increase was what percent of the cost of the item?

(A) 12%
(B) 15%
(C) 20%
(D) 24%
(E) 30%



Gross Profit = Revenue - Cost = Price - Cost

Price = P
Quantity = Q
C = Cost

First sentence: Gross Profit = .2 * C

Second sentence: Gross Profit = .2C = 60 - C

1.2C = 60

C = 60/1.2 = 50

New Gross Profit = 65 - 50 = 15

New Gross Profit/Cost = 15/50 = 3/10 = 30%

Answer: E
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Re: A manufacturer’s gross profit on an item was 20 percent of the cost of  [#permalink]

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New post 27 Sep 2018, 16:22
Bunuel wrote:
A manufacturer’s gross profit on an item was 20 percent of the cost of the item. If the manufacturer increased the selling price of the item from $60 to $65, while kept the cost of the item same, then the manufacturer’s profit on the item after the price increase was what percent of the cost of the item?

(A) 12%
(B) 15%
(C) 20%
(D) 24%
(E) 30%


Letting C = the cost of the item and R = the revenue from selling the item, we can create the equation:

Profit = 0.2C

R - C = 0.2C

R = 1.2C

60 = 1.2C

50 = C

When the price is 65 dollars the profit is 15 dollars, which is 15/50 = 3/10 = 30% of the cost.

Answer: E
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Re: A manufacturer’s gross profit on an item was 20 percent of the cost of  [#permalink]

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New post 29 Sep 2018, 18:56
Bunuel wrote:
A manufacturer’s gross profit on an item was 20 percent of the cost of the item. If the manufacturer increased the selling price of the item from $60 to $65, while kept the cost of the item same, then the manufacturer’s profit on the item after the price increase was what percent of the cost of the item?

(A) 12%
(B) 15%
(C) 20%
(D) 24%
(E) 30%



Selling price (old) = 60.

Selling price (new) = 65

Initially the seller made a profit of 20% on 60.

(60/120)*100 = 50 = cost price.

Now we can find out the profit after increasing the selling price.

profit (new) = 65 - 50 = 15.

Profit % = 15 / 50 = 30%.


The best answer is E.
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Re: A manufacturer’s gross profit on an item was 20 percent of the cost of &nbs [#permalink] 29 Sep 2018, 18:56
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