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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
Joined: 16 Aug 2015
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GMAT 1: 760 Q51 V42
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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, 01:50
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Difficulty:

15% (low)

Question Stats:

75% (01:20) correct 25% (01:47) wrong based on 169 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%

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"Only $79 for 1 month Online Course" "Free Resources-30 day online access & Diagnostic Test" "Unlimited Access to over 120 free video lessons - try it yourself" Math Expert Joined: 02 Aug 2009 Posts: 8309 Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink] ### Show Tags 07 Sep 2017, 02:36 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 _________________ Director Joined: 04 Dec 2015 Posts: 734 Location: India Concentration: Technology, Strategy WE: Information Technology (Consulting) Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink] ### Show Tags 07 Sep 2017, 08:09 3 1 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 $$= (\frac{P}{C}) * 100 = \frac{20}{80} * 100 = \frac{100}{4} = 25$$% Answer (B)... _________________ Please Press "+1 Kudos" to appreciate. Ask GMAT Experts Forum Moderator Status: Preparing for GMAT Joined: 25 Nov 2015 Posts: 1045 Location: India GPA: 3.64 If the gross profit of a certain company is 20 percent of the revenue [#permalink] ### Show Tags 07 Sep 2017, 09:01 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) Math Revolution GMAT Instructor Joined: 16 Aug 2015 Posts: 8257 GMAT 1: 760 Q51 V42 GPA: 3.82 Re: If the gross profit of a certain company is 20 percent of the revenue [#permalink] ### Show Tags 10 Sep 2017, 18:24 => 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 _________________ MathRevolution: Finish GMAT Quant Section with 10 minutes to spare The one-and-only World’s First Variable Approach for DS and IVY Approach for PS with ease, speed and accuracy. "Only$79 for 1 month Online Course"
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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, 02:49
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 ..
Current Student
Joined: 02 Jul 2017
Posts: 280
Concentration: Entrepreneurship, Technology
GMAT 1: 730 Q50 V38
Re: If the gross profit of a certain company is 20 percent of the revenue  [#permalink]

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12 Sep 2017, 03:34
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

Target Test Prep Representative
Affiliations: Target Test Prep
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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, 10:11
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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Joined: 12 Apr 2017
Posts: 142
Location: United States
Concentration: Finance, Operations
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Re: If the gross profit of a certain company is 20 percent of the revenue  [#permalink]

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30 Jan 2019, 12:45
It helps to know
Revenue 100%
less: cost 80%
---------
Gross Profit 20%

Question what is Gross Profit as a % of cost = 20% /80% = 1/4 = 25%
Re: If the gross profit of a certain company is 20 percent of the revenue   [#permalink] 30 Jan 2019, 12:45
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