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# If the gross profit of a certain company is 20 percent of the revenue

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Math Revolution GMAT Instructor
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If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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07 Sep 2017, 00:50
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Difficulty:

25% (medium)

Question Stats:

68% (01:07) correct 32% (01:28) wrong based on 100 sessions

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[GMAT math practice question]

If the gross profit of a certain company is 20 percent of the revenue from sales of the company, what percent of the cost is the gross profit?

A. 20%
B. 25%
C. 30%
D. 35%
E. 40%
[Reveal] Spoiler: OA

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Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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07 Sep 2017, 01:36
MathRevolution wrote:
[GMAT math practice question]

If the gross profit of a certain company is 20 percent of the revenue from sales of the company, what percent of the cost is the gross profit?

A. 20%
B. 25%
C. 30%
D. 35%
E. 40%

Hi..

Be careful in such Q about the Cost, SP and on what will be the profit..
Profit =p
SP=s
Cost price=c
So s=p+c.... But p=20% of s=0.2s..
Substitute in equation
So s=0.2s+c.........c=s-0.2s=0.8s..
Profit/cost = 100*0.2s/0.8s=100/4=25%

B
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Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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07 Sep 2017, 07:09
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MathRevolution wrote:
[GMAT math practice question]

If the gross profit of a certain company is 20 percent of the revenue from sales of the company, what percent of the cost is the gross profit?

A. 20%
B. 25%
C. 30%
D. 35%
E. 40%

Method 1: Profit ($$P$$) $$=$$ Sales price ($$S$$) $$-$$ Cost price ($$C$$)

Given, Profit $$(P)$$ is $$20$$% of Revenue from sales (ie; sales price) $$= \frac{20}{100}*S = \frac{1}{5}S$$

Substituting value of $$P$$ in Profit equation we get;

$$\frac{1}{5}S = S - C$$

$$C = S - \frac{1}{5}S = \frac{5S-1S}{5} = \frac{4}{5}S$$
Required Percentage $$= (\frac{P}{C}) * 100 = (\frac{\frac{1}{5}S}{\frac{4}{5}S}) * 100 = \frac{100}{4} = 25$$%

Method 2: Profit ($$P$$) $$=$$ Sales price ($$S$$) $$-$$ Cost price ($$C$$)

Let $$S = 100$$

Given $$P$$ is $$20$$% of $$S = \frac{20}{100} * 100 = 20$$

$$P = S - C$$

$$20 = 100 - C$$

$$C = 100 - 20 = 80$$

Required percentage $$= (\frac{P}{C}) * 100 = \frac{20}{80} * 100 = \frac{100}{4} = 25$$%

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If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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07 Sep 2017, 08:01
MathRevolution wrote:
[GMAT math practice question]

If the gross profit of a certain company is 20 percent of the revenue from sales of the company, what percent of the cost is the gross profit?

A. 20%
B. 25%
C. 30%
D. 35%
E. 40%

Let S-Sale, C=Cost
Profit P=$$\frac{20}{100}$$S
therefore S - C = $$\frac{20}{100}$$ S
$$\frac{S}{C}= \frac{10}{8}$$
Profit % = $$\frac{(S-C)}{C}$$ x 100 =($$\frac{10}{8}$$-1) x 100= 25% (B)
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Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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10 Sep 2017, 17:24
=>
Let R be the revenue of the company. The profit is 0.2*R and the cost is 0.8*R.
The answer is (0.2*R) / (0.8*R) * 100 = 0.25 * 100 = 25(%).

Ans: B
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Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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12 Sep 2017, 01:49
MathRevolution wrote:
[GMAT math practice question]

If the gross profit of a certain company is 20 percent of the revenue from sales of the company, what percent of the cost is the gross profit?

A. 20%
B. 25%
C. 30%
D. 35%
E. 40%

say sales price = 100
profit = 20
cost = 80

% = 20/80 x 100
25 %

hope this helps ..
cheers ..

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Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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12 Sep 2017, 02:34
Let Profit P, revenue R and Cost C
So as Profit= Revenue -Cost
P=R-C

Given P= 20% of R = 20/100 * R =R/5 => R=5P

Putting in above equation => P =5P-C => C=4P => P=C/4
=> P= 25/100 * C
=> P = 25% of C

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Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink]

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15 Sep 2017, 09:11
MathRevolution wrote:
[GMAT math practice question]

If the gross profit of a certain company is 20 percent of the revenue from sales of the company, what percent of the cost is the gross profit?

A. 20%
B. 25%
C. 30%
D. 35%
E. 40%

Recall that profit = revenue - cost. Letting r = revenue and c = cost, we can create the following equation:

Profit = 0.2r

r - c = 0.2r

0.8r = c

Thus, gross profit is 0.2r/0.8r = 1/4 = 25% of cost.

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Re: If the gross profit of a certain company is 20 percent of the revenue   [#permalink] 15 Sep 2017, 09:11
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