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 Your Progress
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
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:
ACME’s manufacturing costs for sets of horseshoes
[#permalink]
Show Tags
14 Feb 2013, 12:19
2
3
00:00
A
B
C
D
E
Difficulty:
25% (medium)
Question Stats:
82% (02:01) correct 18% (02:09) wrong based on 174 sessions
HideShow timer Statistics
ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit? (A) $20,874.25 (B) $30,943.25 (C) $41,308.50 (D) $51,817.50 (E) $53,624.25
Unless you're Johannes Kepler or Will Hunting, you probably would not be able to do that exact calculation in your head, and of course you get no calculator on the GMAT. With estimation, though, this is a remarkably simple question. For more on the power of estimation on the GMAT, as well as an elegant solution to this question, see: http://magoosh.com/gmat/2012/the-power- ... mat-quant/
Experts, what wisdom and specific tips would you like to share about estimation on the GMAT Quantitative section?
Re: ACME’s manufacturing costs for sets of horseshoes
[#permalink]
Show Tags
13 Aug 2014, 22:45
3
mikemcgarry wrote:
ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit? (A) $20,874.25 (B) $30,943.25 (C) $41,308.50 (D) $51,817.50 (E) $53,624.25
Unless you're Johannes Kepler or Will Hunting, you probably would not be able to do that exact calculation in your head, and of course you get no calculator on the GMAT. With estimation, though, this is a remarkably simple question. For more on the power of estimation on the GMAT, as well as an elegant solution to this question, see: http://magoosh.com/gmat/2012/the-power- ... mat-quant/
Experts, what wisdom and specific tips would you like to share about estimation on the GMAT Quantitative section?
Mike
The OA in this problem have a great variation; so we can use approximation
\(19.75 \approx {20}\)
\(52.50 \approx {50}\)
\(987 \approx {1000}\)
Total Cost Price\(= 11450 + 20*1000 \approx{31000}\)
Re: ACME’s manufacturing costs for sets of horseshoes
[#permalink]
Show Tags
26 Apr 2018, 06:14
Top Contributor
1
mikemcgarry wrote:
ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit? (A) $20,874.25 (B) $30,943.25 (C) $41,308.50 (D) $51,817.50 (E) $53,624.25
Here's a slight twist:
It COSTS $19.75 per set, and each set is SOLD for $52.50 So, the company makes approximately $33 per set ($52.50 - $19.75 ≈ $33)
The company sold 987 sets. So, the profit ≈ ($33)(1000) ≈$33,000
Keep in mind, that there's also the initial outlay of $11,450
So, the TOTAL PROFIT ≈$33,000 - $11,450 ≈ $21,500
The best (closest) answer is A
Cheers, Brent
_________________
Brent Hanneson – GMATPrepNow.com Sign up for our freeQuestion of the Dayemails
Re: ACME’s manufacturing costs for sets of horseshoes
[#permalink]
Show Tags
19 Sep 2018, 20:22
mikemcgarry wrote:
ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit? (A) $20,874.25 (B) $30,943.25 (C) $41,308.50 (D) $51,817.50 (E) $53,624.25
The alternative choices ARE far apart (except the last two ones), therefore we are allowed to use (always carefully!) approximations (to be reconsidered ONLY if we come close to $50,000) !!
This solution follows the notations and rationale taught in the GMATH method.
Regards, fskilnik.
_________________
Fabio Skilnik :: http://www.GMATH.net (Math for the GMAT) Course release PROMO : finish our test drive till 31/Oct with (at least) 60 correct answers out of 92 (12-questions Mock included) to gain a 60% discount!
Re: ACME’s manufacturing costs for sets of horseshoes
[#permalink]
Show Tags
02 Oct 2018, 19:24
mikemcgarry wrote:
ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit? (A) $20,874.25 (B) $30,943.25 (C) $41,308.50 (D) $51,817.50 (E) $53,624.25
The profit is:
987(52.50) - [11,450 + 987(19.75)]
987(52.50) - 11,450 - 987(19.75)
987(52.50 - 19.75) - 11,450
987(32.75) - 11,450
At this point, we will approximate 987 as 1,000 and 32.75 as 32. So the approximate total profit is:
1,000(32) - 11,450
32,000 - 11,450
20,550
We see that this is closest to 20,874.25 in choice A.
Alternate Solution:
Let’s round all the numbers. From the final statement of the problem, we know we’ll sell about 1,000 sets. The initial outlay is about 12,000 and manufacturing costs are about (20) (1000) = 20,000. Thus, costs are about 32,000. Revenue is a bit greater than (50)(1000) = 50,000. Thus, revenue - cost = 50,000 - 32,000 = 18,000. Thus, profit is a bit greater than $18,000.
Answer: A
_________________
Scott Woodbury-Stewart Founder and CEO
GMAT Quant Self-Study Course 500+ lessons 3000+ practice problems 800+ HD solutions
close
82% (02:01) correct 
