goodyear2013 wrote:

Crazy Eddie has a key chain factory. Eddie managed to decrease the cost of manufacturing his key chains while keeping the same selling price, and thus increased the profit from the sale of each key chain from 20% of the selling price to 50% of the selling price. If the manufacturing cost is now $50, what was it before the decrease?

A. $20

B. $40

C. $50

D. $80

E. $100

Dear

goodyear2013,

I'm happy to help.

This is a relatively straightforward problem, not very challenging. BTW, "Crazy Eddie" was the actually name of an electronics chain on the East Coast of the USA back in the 1970s.

Manufacturing now is $50. They now are making a 50% profit, so the selling price must be $100.

They had this same selling price, $100, before they made the change, and had a profit of 20%, so the manufacturing must have been $80. Answer = (D).

Actually, this question is a bit too easy even for the SAT. The question writer designed the question so that the whole, 100%, was equal to $100 --- that plays into many naive assumptions of test takers, exactly the kinds of assumptions that the real GMAT challenges. It would be a mistake for any student to think that, because they find this question easy, they are making progress with GMAT math. In that sense, calling this question a GMAT question is a bit deceptive, because it could misrepresent the difficulty of GMAT Quant section to students.

Here are some more challenging GMAT-like questions involving percents:

http://magoosh.com/gmat/2013/gmat-quant ... -percents/That's my two cents.

Mike

_________________

Mike McGarry

Magoosh Test Prep

Education is not the filling of a pail, but the lighting of a fire. — William Butler Yeats (1865 – 1939)