GMAT Question of the Day: Daily via email | Daily via Instagram New to GMAT Club? Watch this Video

 It is currently 19 Feb 2020, 05:52

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# A small business invests \$9,900 in equipment to produce a

Author Message
TAGS:

### Hide Tags

Intern
Joined: 08 Nov 2008
Posts: 27

### Show Tags

Updated on: 21 Jul 2015, 01:20
1
22
00:00

Difficulty:

5% (low)

Question Stats:

90% (01:46) correct 10% (02:13) wrong based on 841 sessions

### HideShow timer Statistics

A small business invests \$9,900 in equipment to produce a product. Each unit of the product costs \$0.65 to produce and is sold for \$1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000

Originally posted by petercao on 08 Nov 2008, 20:16.
Last edited by Bunuel on 21 Jul 2015, 01:20, edited 1 time in total.
Renamed the topic, edited the question, added the OA and moved to PS forum.
Veritas Prep GMAT Instructor
Joined: 15 Jul 2015
Posts: 110
GPA: 3.62
WE: Corporate Finance (Consulting)
Re: A small business invests \$9,900 in equipment to produce a  [#permalink]

### Show Tags

20 Jul 2015, 12:32
6
4
A small business invests \$9,900 in equipment to produce a product. Each unit of the product costs \$0.65 to produce and is sold for \$1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000

If we ask the question a different way, that answer is much easier to see. The company makes \$0.55 (\$1.20 less the \$0.65) on each product. so how many of these products will need to be made to cover the initial \$9,900 equipment cost. 9,900/0.55 will give us the answer. 9,900/0.55 is 18,000 ==> the correct answer is D.
_________________
##### General Discussion
GMAT Club Legend
Joined: 11 Sep 2015
Posts: 4329
Re: A small business invests \$9,900 in equipment to produce a  [#permalink]

### Show Tags

08 May 2019, 07:24
3
Top Contributor
petercao wrote:
A small business invests \$9,900 in equipment to produce a product. Each unit of the product costs \$0.65 to produce and is sold for \$1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000

Let x = the number of units produced AND sold

TOTAL COST
If each unit of the product costs \$0.65 to produce, then it costs 0.65x dollars to produce x units
We must also add the \$9,900 investment in equipment
So, TOTAL COST = 0.65x + 9900

TOTAL REVENUE
If each unit sells for \$1.20 to produce, then selling x units results in TOTAL SALES of 1.2x dollars

We want: TOTAL REVENUE = TOTAL COST
In other words: 1.2x = 0.65x + 9900
Subtract 0.65x from both sides: 0.55x = 9900
Solve: x = 9900/0.55

PRO TIP: We know that 9900/0.5 = 19,800
Since 0.55 is a bit bigger than 0.5, we know that 9900/0.55 = a little bit LESS THAN 19,800

Cheers,
Brent
_________________
Test confidently with gmatprepnow.com
Intern
Joined: 07 Nov 2008
Posts: 24
Re: A small business invests \$9,900 in equipment to produce a  [#permalink]

### Show Tags

08 Nov 2008, 20:34
1
petercao wrote:
A small business invests \$9,900 in equipment to produce a product. Each unit of the product costs \$0.65 to produce and is sold for \$1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000

the total expense of production is 9,900+0.65x
and the revenue is 1.20x

so x=18,000
Manager
Joined: 30 Sep 2008
Posts: 88
Re: A small business invests \$9,900 in equipment to produce a  [#permalink]

### Show Tags

08 Nov 2008, 20:35
x is the number of units

Total product cost = total expense = 0.65x
Total product sale prices: 1.2x

Revenue receive = 1.2x - 9,900

1.2x - 9,900 = 0.65 <=> x = 18,000 (D)
Target Test Prep Representative
Status: Founder & CEO
Affiliations: Target Test Prep
Joined: 14 Oct 2015
Posts: 9426
Location: United States (CA)
Re: A small business invests \$9,900 in equipment to produce a  [#permalink]

### Show Tags

10 May 2019, 16:34
petercao wrote:
A small business invests \$9,900 in equipment to produce a product. Each unit of the product costs \$0.65 to produce and is sold for \$1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000

We can let n = the number of items produced and create the equation:

1.2n = 9,900 + 0.65n

0.55n = 9,900

n = 18,000

_________________

# Scott Woodbury-Stewart

Founder and CEO

Scott@TargetTestPrep.com
181 Reviews

5-star rated online GMAT quant
self study course

See why Target Test Prep is the top rated GMAT quant course on GMAT Club. Read Our Reviews

If you find one of my posts helpful, please take a moment to click on the "Kudos" button.

Manager
Joined: 25 Sep 2018
Posts: 65
Re: A small business invests \$9,900 in equipment to produce a  [#permalink]

### Show Tags

11 May 2019, 03:54
petercao wrote:
A small business invests \$9,900 in equipment to produce a product. Each unit of the product costs \$0.65 to produce and is sold for \$1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000

Proft per unit =(1.2-0.65)=0.55

9900/0.55=18000 more units of product must be sold to cover the production cost.

Posted from my mobile device
Re: A small business invests \$9,900 in equipment to produce a   [#permalink] 11 May 2019, 03:54
Display posts from previous: Sort by