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10 Feb 2015, 08:46
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
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Question Stats:
66% (02:20) correct
34%
(02:19)
wrong
based on 213
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Java House charges $3.25 for a cup of coffee that costs a total of $2.85 to make. Cup'O'Joe charges $2.80 for a cup that costs $2.65 to make. If Java House sells 55,000 cups of coffee, how many must Cup'O'Joe sell to make at least as much in total gross profit as its competitor does?
A. 7,858
B. 8,301
C. 14,667
D. 63,840
E. 146,667
Kudos for a correct solution.
A. 7,858
B. 8,301
C. 14,667
D. 63,840
E. 146,667
Kudos for a correct solution.
10 Feb 2015, 12:24
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Bunuel
Java House charges $3.25 for a cup of coffee that costs a total of $2.85 to make. Cup'O'Joe charges $2.80 for a cup that costs $2.65 to make. If Java House sells 55,000 cups of coffee, how many must Cup'O'Joe sell to make at least as much in total gross profit as its competitor does?
A. 7,858
B. 8,301
C. 14,667
D. 63,840
E. 146,667
Kudos for a correct solution.
A. 7,858
B. 8,301
C. 14,667
D. 63,840
E. 146,667
Kudos for a correct solution.
Java: Profit/Cup = 3.25-2.85 = 0.4
: No of Cups = 55,000
: Gross Profit = 55,000*0.4 = 22,000
Joe: Profit/Cup = 0.15
: Gross Profit = 22,000
: No of Cups = 22,000/0.15 = 220,000/1.5 (only closes is 146,667)
Answer E
A Short Cut: Just based on profit per cup of java v/s that of joe, we know that total number of cups for joe has to much greater than that of java to make same amount of profit. Easily eliminates A,B,C. Now D is still too small because profit/cup for joe is less than half of that of java so by that rationale no. of cups for joe should be more than double for that of java... only logical answer seems to be E.
shelrod007
Joined: 23 Jan 2013
Last visit: 16 Sep 2016
Posts: 99
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Concentration: Technology, Other
Schools: Berkeley Haas
GMAT Date: 01-14-2015
WE:Information Technology (Computer Software)
10 Feb 2015, 12:30
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Gross Profit made by Java House = ( 3.25 - 2.85 ) * 55000
Gross Profit made by Cup O joe house = (2.80 - 2.65 ) * X , where X is the number of cups Cup O joe needs to sell .
In order for Cup O Joe of break even with Java House equate the two equations
( 3.25 - 2.85 ) * 55000 = (2.80 - 2.65 ) * X
X = (0.4 * 55000 ) / 0.15
= 146,666.4 .
Answer is E
Gross Profit made by Cup O joe house = (2.80 - 2.65 ) * X , where X is the number of cups Cup O joe needs to sell .
In order for Cup O Joe of break even with Java House equate the two equations
( 3.25 - 2.85 ) * 55000 = (2.80 - 2.65 ) * X
X = (0.4 * 55000 ) / 0.15
= 146,666.4 .
Answer is E
