A store purchased a computer for $800 and then sold it. Was the store

Question

A store purchased a computer for $800 and then sold it. Was the store's gross profit on the computer greater than $200 ?

(1) The store sold the computer for more than $950.

(2) The store's gross profit on the computer was more than 20 percent of the price for which the store sold the computer.

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gmatophobia · Accepted Answer

Statement 1

(1) The store sold the computer for more than $950.

Case 1:   If the store sold the computer for $951, the gross profit is $151. 
The response to the question "Was the store's gross profit on the computer greater than $200 ? " is No

Case 2:   If the store sold the computer for a value greater than $1000, the gross profit is greater than $200. 
The response to the question "Was the store's gross profit on the computer greater than $200 ? " is Yes

As we are getting two contradictory answers, statement 1 is not sufficient to answer the question. Eliminate A and D.

Statement 2

(2) The store's gross profit on the computer was more than 20 percent of the price for which the store sold the computer.

Assume that the selling price of the contract is $x

The store's gross profit is greater than $0.2x

Profit = Selling Price - Cost Price

= x - 800

If the gross profit were 0.2x :

0.2x = x - 800

0.8x = 800

x = $1000

Conclusion : If the gross profit were 0.2x, the selling price of the computer would be $1000. The profit in that case would be $200. We know that the profit was greater than $0.2x, hence we can conclude that the profit was greater than $200.

This statement is sufficient to answer the question " Was the store's gross profit on the computer greater than $200 ? ", and the answer is always "Yes".

Statement 2 is sufficient.

Option B

sayan640 · Answer

KarishmaB   GMATinsight  would you like to explain this question ?

KarishmaB · Answer

Cost Price = $800
Was Selling Price > $1000?

(1) The store sold the computer for more than $950.

Selling Price > 950
Not sufficient alone.

(2) The store's gross profit on the computer was more than 20 percent of the price for which the store sold the computer.

Profit > 20% of Selling Price 
If profit were exactly 20% of selling price,

Cost Price + Profit = Selling Price
800 + 20% of Selling Price = Selling Price
Selling  Price = 1000

But since profit is more than 20% of selling price, the selling price must be higher than $1000 to get higher profit. 
Sufficient alone.

Answer (B)

bumpbot · Answer

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A store purchased a computer for $800 and then sold it. Was the store

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A store purchased a computer for $800 and then sold it. Was the store