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# Crazy Eddie has a key chain factory. Eddie managed to

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Senior Manager
Joined: 21 Oct 2013
Posts: 416
Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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21 Jul 2014, 08:38
2
3
00:00

Difficulty:

25% (medium)

Question Stats:

85% (02:23) correct 15% (02:39) wrong based on 114 sessions

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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
Magoosh GMAT Instructor
Joined: 28 Dec 2011
Posts: 4486
Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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21 Jul 2014, 10:02
3
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) SVP Status: The Best Or Nothing Joined: 27 Dec 2012 Posts: 1817 Location: India Concentration: General Management, Technology WE: Information Technology (Computer Software) Re: Crazy Eddie has a key chain factory. Eddie managed to [#permalink] ### Show Tags 03 Dec 2014, 00:19 ............................ Cost Price .................. Selling Price ................... Profit Earlier ................... x ...................................... y .......................... $$y-x = \frac{20}{100} y$$ .............. (1) Now ...................... 50 ....................................... y ......................... $$y-50 = \frac{50}{100} y$$ 2(y-50) = y y = 100 Placing value of y in equation (1) $$100-x = \frac{100}{5}$$ x = 80 Answer = D _________________ Kindly press "+1 Kudos" to appreciate Director Joined: 23 Jan 2013 Posts: 552 Schools: Cambridge'16 Re: Crazy Eddie has a key chain factory. Eddie managed to [#permalink] ### Show Tags 03 Dec 2014, 02:28 cost+profit=income (selling price) profit now = 0.5x or x-50 0.5x=x-50 50=0.5x x=100$ is selling price

so, profit before was 0.2*100=20$cost=100-20=80$

D
Director
Joined: 12 Nov 2016
Posts: 724
Location: United States
Schools: Yale '18
GMAT 1: 650 Q43 V37
GRE 1: Q157 V158
GPA: 2.66
Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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24 Jun 2017, 00:50
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

If the selling price of a key chain made by Eddie is held constant and the profits earned from manufacturing the key chain at a different price are higher then the original manufacturing price must be higher because the profit as a percentage of the selling price has increased.

$100 selling price -$80 Manufacturing Price = 20 dollar profit or alternatively $100(.20%)$100 selling price- $50 Manufacturing Price - = 50 dollar profit or alternatively$100(.50%)

Thus
"D"
Intern
Joined: 17 Apr 2013
Posts: 2
Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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08 Sep 2018, 00:34
A,B,C--> out as less than or equal 50. Then keep 100 and 80 to the below equation. 100 is not matching so out.
Ans D.

For D if we put CP=80 from the ans choice
x=SP
Profit= SP-CP
Earlier
=====
0.8x=x-80
x=100

Now
===
1.5x=x-50
0.5x=50
x=100. So matching.
Re: Crazy Eddie has a key chain factory. Eddie managed to   [#permalink] 08 Sep 2018, 00:34
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# Crazy Eddie has a key chain factory. Eddie managed to

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