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08 Jan 2018, 22:45
1
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Difficulty:

55% (hard)

Question Stats:

56% (02:22) correct 44% (03:34) wrong based on 44 sessions

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John and Ed work for the same Sales Company. John receives a $600 basic salary plus 20 percent of any profit he realizes for the company in excess of$5,000, while Ed receives an $800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than$8,000, otherwise he receives a flat salary of $1,000. For what amount of profit will both John and Ed earn the same amount? A.$1,000
B. $1,200 C.$2,400
D. $6,000 E.$7,000

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John and Ed work for the same Sales Company. John receives a $600 basi [#permalink] ### Show Tags 09 Jan 2018, 00:11 2 Bunuel wrote: John and Ed work for the same Sales Company. John receives a$600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an$800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of$1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000 B.$1,200
C. $2,400 D.$6,000
E. $7,000 John's salary is 600$ + 20% of the profit from sales > $5000 Ed's salary is 800$ + 40% of the profit from sales > $8000 (Else, he receives a flat salary of$1000)

Since the basic salary of John is 600$and he receives 20% over 5000$ in profit,
in order to make the earnings equal, $$0.2*(x-5000) + 600 = 1000$$
The reason Ed's earning will not be greater than the flat rate of $1000 is because Ed earns 40% of the sales, whereas John earns only 20% of the sales Simplifying this further, we get $$0.2*(x-5000) = 400$$ -> $$x-5000 = 2000$$ -> $$x = 7000$$ Therefore, at 7000(Option E) as the common profit, John and Ed earn the same amount. _________________ You've got what it takes, but it will take everything you've got Manager Joined: 23 Oct 2017 Posts: 64 Re: John and Ed work for the same Sales Company. John receives a$600 basi  [#permalink]

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09 Jan 2018, 20:18
Based on the problem stmt:
J = 600 + 20%(P-5000) where P is the profit, and J is the salary recieved by John

E = 800 + 40% of P (if P >8000)
else E=1000

lets see if for any value of P we can have J = E .. on solving we get P=7000
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Re: John and Ed work for the same Sales Company. John receives a $600 basi [#permalink] ### Show Tags 26 Jul 2018, 02:18 Bunuel wrote: John and Ed work for the same Sales Company. John receives a$600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an$800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of$1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000 B.$1,200
C. $2,400 D.$6,000
E. $7,000 We can PLUG IN THE ANSWERS, which represent the amount of profit. Since Ed earns a flat salary of$1000 if the amount of profit does not exceed $8000 -- and all of the answer choices are less than 8000 -- Ed's earnings =$1000.
Since John and Ed must earn the same amount, John must also earn $1000. John earns a$600 base salary plus 20% of any profit in excess of $5000. Thus, for John to earn$1000, the correct answer must be greater than 5000.
Eliminate A, B and C.
When the correct answer is plugged in, the amount of profit in excess of $5000 will yield John an additional$400 on top of his $600 base salary, bringing his total earnings to$1000.

D: 6000, implying $1000 profit in excess of$5000
Additional earnings for John = 20% of $1000 = 200. Too small. Eliminate D. E: 7000, implying$2000 profit in excess of $5000 Additional earnings for John = 20% of$2000 = 400.
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Re: John and Ed work for the same Sales Company. John receives a $600 basi [#permalink] ### Show Tags 26 Jul 2018, 02:49 Bunuel wrote: John and Ed work for the same Sales Company. John receives a$600 basic salary plus 20 percent of any profit he realizes for the company in excess of $5,000, while Ed receives an$800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than $8,000, otherwise he receives a flat salary of$1,000. For what amount of profit will both John and Ed earn the same amount?

A. $1,000 B.$1,200
C. $2,400 D.$6,000
E. $7,000 According to question - John's earning => 600 + 20% (P - 5000) ------ (1) where P is the amount company earned Ed's earning => 800 + 40% (P) where P is the amount company earned ---------------------------- Now if P < 8000 then Ed's earning => 1000 ------ (2) if P>8000 Ed's earning => 800 + 40% (Q) ------ (3) Now question says for what profit (P) will they earn the same amount i.e John's earning = Ed's earning Now if we look at the options, we see that P is less than 8000, therefore Ed's earning will be 1000 (From (2)) Therefore using (1) and (2) 600 + 20% (P - 5000) = 1000 On solving this we get P = 7000 Hence E _________________ Regards AD --------------------------------- A Kudos is one more question and its answer understood by somebody !!! Target Test Prep Representative Status: Head GMAT Instructor Affiliations: Target Test Prep Joined: 04 Mar 2011 Posts: 2830 Re: John and Ed work for the same Sales Company. John receives a$600 basi  [#permalink]

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30 Jul 2018, 10:48
Bunuel wrote:
John and Ed work for the same Sales Company. John receives a $600 basic salary plus 20 percent of any profit he realizes for the company in excess of$5,000, while Ed receives an $800 basic salary in addition to 40 percent of any profit he realizes for the company only if the total profit he realizes is greater than$8,000, otherwise he receives a flat salary of $1,000. For what amount of profit will both John and Ed earn the same amount? A.$1,000
B. $1,200 C.$2,400
D. $6,000 E.$7,000

Notice that Ed earns a higher basic salary and a higher percentage of the profit (if the profit is over $8000) than John. Therefore, there is no way John will earn the same amount as Ed unless the profit is not over$8000. In that case, Ed will only receive a flat salary of $1,000. Therefore, we can create the equation: 600 + 0.2(P - 5000) = 1000 0.2P - 1000 = 400 0.2P = 1400 P = 1400/0.2 = 14000/2 = 7000 Answer: E _________________ Jeffery Miller Head of GMAT Instruction GMAT Quant Self-Study Course 500+ lessons 3000+ practice problems 800+ HD solutions Re: John and Ed work for the same Sales Company. John receives a$600 basi &nbs [#permalink] 30 Jul 2018, 10:48
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