It is currently 23 Jun 2017, 00:18

### 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

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# ACME’s manufacturing costs for sets of horseshoes include

Author Message
TAGS:

### Hide Tags

Magoosh GMAT Instructor
Joined: 28 Dec 2011
Posts: 4125
ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

25 Sep 2013, 10:55
Expert's post
1
This post was
BOOKMARKED
00:00

Difficulty:

25% (medium)

Question Stats:

77% (02:47) correct 23% (01:56) wrong based on 242 sessions

### HideShow timer Statistics

Without a calculator, solve this problem in 90 seconds.

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

For a discussion of the valuable skill of estimation on the GMAT Quant section, as well as an efficient solution to this problem, see:
http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike
[Reveal] Spoiler: OA

_________________

Mike McGarry
Magoosh Test Prep

 Magoosh Discount Codes Veritas Prep GMAT Discount Codes EMPOWERgmat Discount Codes
Intern
Joined: 05 Oct 2013
Posts: 21
Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

26 Oct 2013, 08:15
mikemcgarry wrote:
Without a calculator, solve this problem in 90 seconds.

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

For a discussion of the valuable skill of estimation on the GMAT Quant section, as well as an efficient solution to this problem, see:
http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike

Their profit was 987*(52.5-19.75) -11.450 ~1000*32 -11,500 ~ 20,000. The answer is A
Senior Manager
Joined: 08 Apr 2012
Posts: 454
Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

05 Nov 2013, 03:18
mikemcgarry wrote:
Without a calculator, solve this problem in 90 seconds.

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

For a discussion of the valuable skill of estimation on the GMAT Quant section, as well as an efficient solution to this problem, see:
http://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike

Hi Mike,

I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?
Magoosh GMAT Instructor
Joined: 28 Dec 2011
Posts: 4125
Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

05 Nov 2013, 12:40
ronr34 wrote:
Hi Mike,
I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?

Dear ronr34,
As with many things with numbers, you need to develop number sense. Here's a blog about it
http://magoosh.com/gmat/2012/number-sense-for-the-gmat/
Developing number sense takes time. The more you do math without any calculator, the more your intuition for numbers will develop.

When I estimate, I often try to make things as simple as possible. Numbers with only one non-zero digit are very simple ---- that's a good target for GMAT estimation. Starting with 11,450, the closest number with only one non-zero digit is 10,000. Usually, on GMAT questions, that's a fine level for estimation. It's very convenient, because even if you have to multiply, it's just one-digit arithmetic with some zeros stuck at the end. ---- If you can compensate a round-up with a round-down, that can help, but often even that is not necessary, especially if the answer choices are very far apart.

Does this make sense?
Mike
_________________

Mike McGarry
Magoosh Test Prep

Senior Manager
Joined: 08 Apr 2012
Posts: 454
Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

07 Nov 2013, 15:02
mikemcgarry wrote:
ronr34 wrote:
Hi Mike,
I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?

Dear ronr34,
As with many things with numbers, you need to develop number sense. Here's a blog about it
http://magoosh.com/gmat/2012/number-sense-for-the-gmat/
Developing number sense takes time. The more you do math without any calculator, the more your intuition for numbers will develop.

When I estimate, I often try to make things as simple as possible. Numbers with only one non-zero digit are very simple ---- that's a good target for GMAT estimation. Starting with 11,450, the closest number with only one non-zero digit is 10,000. Usually, on GMAT questions, that's a fine level for estimation. It's very convenient, because even if you have to multiply, it's just one-digit arithmetic with some zeros stuck at the end. ---- If you can compensate a round-up with a round-down, that can help, but often even that is not necessary, especially if the answer choices are very far apart.

Does this make sense?
Mike

Great.
I followed the link and others that were in the post.
but I still sometimes, when the answers are close together and there is not big split, get confused.
Current Student
Joined: 06 Sep 2013
Posts: 1998
Concentration: Finance
Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

14 Jan 2014, 07:29
mikemcgarry wrote:
ronr34 wrote:
Hi Mike,
I followed the link be I didn't understand the concept as to when do you round up and when do you round down?
When you rounded 11450 to 10000 it seems like a lot to round down. I thought that once you did that, you would round
both the other number up to account for it.
Does it even matter? How do you choose?

Dear ronr34,
As with many things with numbers, you need to develop number sense. Here's a blog about it
http://magoosh.com/gmat/2012/number-sense-for-the-gmat/
Developing number sense takes time. The more you do math without any calculator, the more your intuition for numbers will develop.

When I estimate, I often try to make things as simple as possible. Numbers with only one non-zero digit are very simple ---- that's a good target for GMAT estimation. Starting with 11,450, the closest number with only one non-zero digit is 10,000. Usually, on GMAT questions, that's a fine level for estimation. It's very convenient, because even if you have to multiply, it's just one-digit arithmetic with some zeros stuck at the end. ---- If you can compensate a round-up with a round-down, that can help, but often even that is not necessary, especially if the answer choices are very far apart.

Does this make sense?
Mike

Yes mike it does make sense and that is what I usually do in this case 987 = 1000
and 52.5-19.75 is just something near 32

And then 11,450 is just near 12,000

So everything comes near 20,000

Also when estimating it is important to try to compensate rounding and also in fractions good to know the heavy division shortcut for some problems that involve raw estimates

Just my 2cents

Cheers!
J
Manager
Joined: 14 Sep 2014
Posts: 94
WE: Engineering (Consulting)
Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

31 Oct 2014, 10:08
approximations
19.75 = 20.00
52.50 = 50
987 = 1000
Initial cost = 20*1000 + 11450 = 31450
Selling = 50 * 1000 = 50000
Profit = 50000 - 31450 = 19000
close to 20k ans. A
GMAT Club Legend
Joined: 09 Sep 2013
Posts: 15918
Re: ACME’s manufacturing costs for sets of horseshoes include [#permalink]

### Show Tags

11 Feb 2017, 16:11
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.
_________________
Re: ACME’s manufacturing costs for sets of horseshoes include   [#permalink] 11 Feb 2017, 16:11
Similar topics Replies Last post
Similar
Topics:
22 A manufacturer makes umbrellas at the cost of c dollars pe 9 28 Feb 2017, 22:12
4 ACME’s manufacturing costs for sets of horseshoes 4 28 May 2016, 11:53
24 The ACME company manufactured x brooms per month from Januar 14 16 Nov 2016, 09:54
88 Which of the following sets includes ALL of the solutions of 35 27 Oct 2016, 10:21
1 The cost C of manufacturing a product can be estimated by the formula 15 19 Dec 2014, 14:09
Display posts from previous: Sort by