December 17, 2018 December 17, 2018 06:00 PM PST 07:00 PM PST Join our live webinar and learn how to approach Data Sufficiency and Critical Reasoning problems, how to identify the best way to solve each question and what most people do wrong. December 16, 2018 December 16, 2018 07:00 AM PST 09:00 AM PST Get personalized insights on how to achieve your Target Quant Score.
Author 
Message 
TAGS:

Hide Tags

Math Expert
Joined: 02 Sep 2009
Posts: 51230

A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
07 Mar 2017, 01:05
Question Stats:
60% (02:30) correct 40% (03:05) wrong based on 233 sessions
HideShow timer Statistics



Director
Joined: 21 Mar 2016
Posts: 521

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
07 Mar 2017, 04:00
since the profit % is 20, the cost price is 2.5$. cost of 1 litre is 2.5$.
since selling price remains same,, inorder to get 50% margin the cost price should be 2$.
hence reduce the volume by 20%
ans B



Senior Manager
Joined: 24 Apr 2016
Posts: 331

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
07 Mar 2017, 12:09
Let the cost of oneliter container = $100x After 20% profit the Selling Price of the oneliter container = $120x Given Selling Price of the oneliter container = $3
Finding value of X => 120x= 3 => x=1/40 therefore cost of oneliter container = $100x = 100 * 1/40 = $2.5
Now to get 50% profit, the selling price would be $150x, if the initial cost is 100x Given: Selling Price remains the same, therefore, 150x=3 => x=1/50 Cost Price = $100x = 100* 1/50 = $2
therefore the reduction in volume = (2.5  2) *100 /2.5 = 20%
Answer is B. 20%



Manager
Joined: 03 Jan 2017
Posts: 151

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
07 Mar 2017, 13:58
(3C)/C=0,2 C=2,5 (3C)/C=0,5 C=2 (2,52)/2,5=0,2
Answer by 20% (B)



Manager
Joined: 14 Sep 2016
Posts: 60
Concentration: Finance, Economics

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
07 Mar 2017, 14:02
Bunuel wrote: A soft drink company currently sells its most popular product in oneliter containers for $3, yielding a 20% profit margin on the cost. If cost is proportional to volume, by what percent should the company reduce the volume of the container to yield a 50% profit margin on the cost, assuming the selling price remains the same?
A. 10% B. 20% C. 25% D. 33% E. 50% A little confusing because a profit margin is never calculated as a percent of cost rather than percent of revenue... Old Revenue 3 Expense 2.5 80.00% Gross Profit 0.5 20.00% New Revenue 3 Expense 2 50.00% Gross Profit 1 50.00% 0.5/2.5 = 20%



Senior SC Moderator
Joined: 14 Nov 2016
Posts: 1324
Location: Malaysia

A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
21 Mar 2017, 04:12
Bunuel wrote: A soft drink company currently sells its most popular product in oneliter containers for $3, yielding a 20% profit margin on the cost. If cost is proportional to volume, by what percent should the company reduce the volume of the container to yield a 50% profit margin on the cost, assuming the selling price remains the same?
A. 10% B. 20% C. 25% D. 33% E. 50% OFFICIAL SOLUTION Begin by finding the cost of the 1liter container: 1.2c = 3, and c = 2.5. Next, let’s figure out how much the product cost should be to create the 50% profit margin: 1.5x = 3, and x = 2. Since cost is proportional to volume, the percent change in cost is the same as the percent change in volume: \(\frac{(2.5  2.0)}{2.5} = \frac{0.5}{2.5}\)= 20%.
_________________
"Be challenged at EVERY MOMENT."
“Strength doesn’t come from what you can do. It comes from overcoming the things you once thought you couldn’t.”
"Each stage of the journey is crucial to attaining new heights of knowledge."
Rules for posting in verbal forum  Please DO NOT post short answer in your post!
Advanced Search : https://gmatclub.com/forum/advancedsearch/



Manager
Joined: 13 Dec 2013
Posts: 155
Location: United States (NY)
Concentration: General Management, International Business
GMAT 1: 710 Q46 V41 GMAT 2: 720 Q48 V40
GPA: 4
WE: Consulting (Consulting)

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
04 Apr 2017, 19:40
1L=3 Sale price = 3 Cost price = 3*(5/6) = 2.50 Cost price for profit to equal 50% of cost price = 2 2.50*0.8=2. A 20% reduction. If volume is proportional to cost then volume must also be reduced by 20%. B
Kudos if you agree!



Current Student
Joined: 12 Aug 2015
Posts: 2627

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
16 Jun 2017, 18:18



Manager
Joined: 31 Dec 2016
Posts: 73

A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
08 Jul 2017, 11:22
IdiomSavant wrote: Bunuel wrote: A soft drink company currently sells its most popular product in oneliter containers for $3, yielding a 20% profit margin on the cost. If cost is proportional to volume, by what percent should the company reduce the volume of the container to yield a 50% profit margin on the cost, assuming the selling price remains the same?
A. 10% B. 20% C. 25% D. 33% E. 50% A little confusing because a profit margin is never calculated as a percent of cost rather than percent of revenue... Old Revenue 3 Expense 2.5 80.00% Gross Profit 0.5 20.00% New Revenue 3 Expense 2 50.00% Gross Profit 1 50.00% 0.5/2.5 = 20% Exactly, the wording is bad but probably intentionally so. A 20% profit margin on the cost means X * 1.2 = 3. So 3/1.2 is $2.5, which is the cost. If 2.5 is the cost what do we need to reduce it buy to get to 50%? well X *1.5 = 3 and 3/1.5 = 2. Therefore we reduced the volume from 2.5 to 2 or 0.5 /2.5 or 20%



Senior Manager
Joined: 28 Jun 2015
Posts: 292
Concentration: Finance
GPA: 3.5

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
08 Jul 2017, 18:28
SP = $3, P = 0.2, so CP = $3/1.2 = $2.5. For P to be 0.5, CP = $3/1.5 = $2. Since the volume is proportional to the cost, the volume should be reduced by (1  2/2.5) = 20%. Ans  B.
_________________
I used to think the brain was the most important organ. Then I thought, look what’s telling me that.



NonHuman User
Joined: 09 Sep 2013
Posts: 9193

Re: A soft drink company currently sells its most popular product in onel
[#permalink]
Show Tags
18 Aug 2018, 04:21
Hello from the GMAT Club BumpBot! Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up  doing my job. I think you may find it valuable (esp those replies with Kudos). Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________
GMAT Books  GMAT Club Tests  Best Prices on GMAT Courses  GMAT Mobile App  Math Resources  Verbal Resources




Re: A soft drink company currently sells its most popular product in onel &nbs
[#permalink]
18 Aug 2018, 04:21






