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Crazy Eddie has a key chain factory. Eddie managed to

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

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New post 21 Jul 2014, 08:38
2
3
00:00
A
B
C
D
E

Difficulty:

  25% (medium)

Question Stats:

87% (01:58) correct 13% (03:01) wrong based on 104 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
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Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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New post 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 :-)
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Mike McGarry
Magoosh Test Prep

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Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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New post 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
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Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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New post 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$

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Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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New post 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"
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Re: Crazy Eddie has a key chain factory. Eddie managed to  [#permalink]

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New post 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 &nbs [#permalink] 08 Sep 2018, 00:34
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