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In 1995 a certain store had 1,800 tools in stock that had been purchas

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In 1995 a certain store had 1,800 tools in stock that had been purchas [#permalink]

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New post 12 Nov 2009, 02:29
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Difficulty:

  15% (low)

Question Stats:

76% (01:10) correct 24% (00:44) wrong based on 223 sessions

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In 1995 a certain store had 1,800 tools in stock that had been purchased for $30 each. If 1,000 of these tools were sold in 1995 for $40 each and the remaining 800 were sold in 1996 for $50 each, how many greater was the gross profit on the tools sold in 1996 than the gross profit on those sold in 1995?

A. $0
B. $6,000
C. $8,000
D. $32,000
E. $40,000
Spoiler: OA
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Re: In 1995 a certain store had 1,800 tools in stock that had been purchas [#permalink]

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New post 12 Nov 2009, 02:33
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Profit = Revenue - Charge


P(1995) = 40.1000 - 30.1000 = 10.000
P(1996) = 50.800 - 30.800 = 20.800 = 16.000

Ans is 6000$
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Re: In 1995 a certain store had 1,800 tools in stock that had been purchas [#permalink]

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New post 12 Nov 2009, 02:51
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1
The keyword here is "Gross Profit":

Gross Profit = (Selling Price - Original Price)*(# of Items Sold)

So lets figure out what the Gross Profit for 1995:

GP1995 = (40-30)*(1000) = 10000

And the Gross Profit for 1996:

GP1996 = (50-30)*(800) = 16000

So the difference would be:

16000-10000 = 6000

ANSWER: B. 6000
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Re: In 1995 a certain store had 1,800 tools in stock that had been purchas [#permalink]

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New post 01 May 2011, 22:51
profit '95 = 1000*40 - 1000*30= 10,000
profit '96 = 800 * 50 - 800 *30 = 16,000
Thus difference = 6000.B
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Re: In 1995 a certain store had 1,800 tools in stock that had been purchas [#permalink]

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New post 17 Feb 2018, 17:09
Hello, I was uncertain about Gross Profit and Net Profit. I chose Answer A, "0" because the sales in 1995 was 40,000.
1000 * 40 = 40,000
In 1996 sales was also 40,000. 800 * 50 = 40,000. So there was no difference. I thought that was Gross profit.

My thinking is that NET profit is the one that would factor on the initial cost of buying all for $30 each.
Thus the NET profit in 1995 is $10 profit * 1000 = $10,000
ANd NET profit in 1996 is $20 * 800 = $16,000

When do I use NET profit vs GROSS profit?
Re: In 1995 a certain store had 1,800 tools in stock that had been purchas   [#permalink] 17 Feb 2018, 17:09
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