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28 Aug 2018, 08:00
2
00:00

Difficulty:

55% (hard)

Question Stats:

68% (02:39) correct 32% (03:16) wrong based on 44 sessions

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A vendor sells specialty gift baskets at a price of $50.00 per basket, which represents a markup of 25% above the cost to produce each basket. The vendor prepared and delivered an order of 120 baskets to a customer. However, that customer returned 15 baskets and requested a partial refund. How much should the vendor refund per basket so that the vender makes a 20% profit on the initial cost of the 120 baskets?$10
$16$20
$34$40
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Joined: 02 Aug 2009
Posts: 8023
Re: A vendor sells specialty gift baskets at a price of $50.00 per basket [#permalink] ### Show Tags 28 Aug 2018, 08:21 1 pratik2018 wrote: A vendor sells specialty gift baskets at a price of$50.00 per basket, which represents a markup of 25% above the cost to produce each basket. The vendor prepared and delivered an order of 120 baskets to a customer. However, that customer returned 15 baskets and requested a partial refund. How much should the vendor refund per basket so that the vender makes a 20% profit on the initial cost of the 120 baskets?

$10$16
$20$34
$40 25% above cost resulting in 50 = 50*100/125=40 So cost of 120 baskets = 40*120=4800 20% above it =4800*120/100=5760 Initial selling price = 50*120=6000 So refund =6000-5760=240 So refund per basket = 240/15=16 B _________________ Senior Manager Joined: 22 Feb 2018 Posts: 419 Re: A vendor sells specialty gift baskets at a price of$50.00 per basket  [#permalink]

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28 Aug 2018, 08:57
1
pratik2018 wrote:
A vendor sells specialty gift baskets at a price of $50.00 per basket, which represents a markup of 25% above the cost to produce each basket. The vendor prepared and delivered an order of 120 baskets to a customer. However, that customer returned 15 baskets and requested a partial refund. How much should the vendor refund per basket so that the vender makes a 20% profit on the initial cost of the 120 baskets?$10
$16$20
$34$40

OA: B
Selling price : $50.00 per basket Selling price = Cost price + Markup = Cost price + 25%Cost price=1.25 Cost price Cost Price $$= \frac{Selling price}{1.25}= \frac{50.00}{1.25} = 40.00 per basket$$ Cost of Selling $$120$$ baskets = $$40.00 *120$$ Profit margin without considering refund: 25% of total cost Profit margin after considering refund : 20% of total cost Total refund = (25% -20%) of total cost =5% of total cost $$= \frac{5}{100}*40.00 *120$$ Refund per basket $$=\frac{\frac{5}{100}*40.00 *120}{15}=16$$ _________________ Good, good Let the kudos flow through you Senior Manager Joined: 04 Aug 2010 Posts: 477 Schools: Dartmouth College Re: A vendor sells specialty gift baskets at a price of$50.00 per basket  [#permalink]

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28 Aug 2018, 10:57
pratik2018 wrote:
A vendor sells specialty gift baskets at a price of $50.00 per basket, which represents a markup of 25% above the cost to produce each basket. The vendor prepared and delivered an order of 120 baskets to a customer. However, that customer returned 15 baskets and requested a partial refund. How much should the vendor refund per basket so that the vender makes a 20% profit on the initial cost of the 120 baskets?$10
$16$20
$34$40

The $50 selling price yields 25% profit and thus is equal to 125% of the cost per basket. The final selling price yields 20% profit and thus is equal to 120% of the cost per basket. The following proportion is implied: $$\frac{50}{x} = \frac{125}{120}$$ $$\frac{50}{x} = \frac{25}{24}$$ $$25x = 24*50$$ $$x = 24*2$$ $$x = 48$$ The$48 final selling price is $2 less than the original$50 selling price, implying that $2 must be refunded for each of the 120 baskets: $$2*120 = 240$$ Since this$240 refund is divided equally among the 15 returned baskets, the refund per basket = $$\frac{240}{15} = \frac{80}{5} = 16$$

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