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Difficulty:
85%
(hard)
Question Stats:
62% (03:08) correct
38%
(02:50)
wrong
based on 260
sessions
History
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Jack gave 20% discount on sale of 15 toys & generated revenue of 600$. He earned 25% profit on this sale. Next day he sold 20 toys without any discount. what is his gross profit in two days?
a) 240 $
b) 360 $
c) 480 $
d) 510 $
e) 550 $
Question Source: Expert's Global practice test
a) 240 $
b) 360 $
c) 480 $
d) 510 $
e) 550 $
Question Source: Expert's Global practice test
JackMasterNone
He earned 25% profit --> cost of 15 toys = $600/1.25 = $480 (cost*1.25 = sales). So, cost of 1 toy = $480/15 = $32.
Profit from 15 toys = $600 - $480 = $120.
Undiscounted price for 15 toys = $600/0.8 = $750.
Undiscounted price for 20 toys = $750*20/15 = $1,000.
Profit from 20 toys = $1,000 - $32*20 = $360.
Total profit = $120 + $360 = $480.
Answer: C.
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General Discussion
Posts: 3
First day:
Total Revenues = 600
Price = 600/15 = 40
Total Cost = Total Revenes * (1-0,25) = 600*0,75 = 450
Cost per unit = 450/15=30
Total Profit = 600-450=150
Second day:
Price = 40/(1-discount) = 40/0.8 = 50
Cost per unit = 30
Total revenues = 20*50=1000
Total cost=20*30=600
Total profit = 1000-600=400
Profit of two days = 150+400=550
Option E
Total Revenues = 600
Price = 600/15 = 40
Total Cost = Total Revenes * (1-0,25) = 600*0,75 = 450
Cost per unit = 450/15=30
Total Profit = 600-450=150
Second day:
Price = 40/(1-discount) = 40/0.8 = 50
Cost per unit = 30
Total revenues = 20*50=1000
Total cost=20*30=600
Total profit = 1000-600=400
Profit of two days = 150+400=550
Option E
revenue = price x qt
Day 1
600 = 0,8p x 15
P = 50
Profit = revenue - cost, but as the exercise stated that the profit is 25% of sales I assumed a profit of $ 150
Day 2
50 x 20 = 1000
Profit = 250
Total Profit = $ 400
Why it didn't work?
i didnt' get the formula that Bunuel applied
Day 1
600 = 0,8p x 15
P = 50
Profit = revenue - cost, but as the exercise stated that the profit is 25% of sales I assumed a profit of $ 150
Day 2
50 x 20 = 1000
Profit = 250
Total Profit = $ 400
Why it didn't work?
i didnt' get the formula that Bunuel applied
The wording should be clarified: 25% profit on this sale --> 25% profit on the cost he paid for the toys. In this case, 1.25 x cost = 600, cost = 480 and profit is 600 - 480 = 120 for day 1.
Sent from my iPhone using GMAT Club Forum mobile app
Sent from my iPhone using GMAT Club Forum mobile app
Suraj17018
Joined: 23 Dec 2020
Last visit: 10 Jul 2022
Posts: 2
Location: India
Schools: LBS '24 Judge '24 Oxford Said'25
GMAT 1: 710 Q50 V35
GPA: 3.5
This is a very tricky question in the sense that it mentioned Gross profit on cost and not on sales. We are more used to using GP% over sales.
GP% (when given on sales) = (Sales-Cost)/Sales
GP% (when given on cost) = (Sales-Cost)/Cost
Substituting the values, we'll get the cost price as $32, and further the question can be solved.
GP% (when given on sales) = (Sales-Cost)/Sales
GP% (when given on cost) = (Sales-Cost)/Cost
Substituting the values, we'll get the cost price as $32, and further the question can be solved.
Abhishek009
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Bombsante
R = 600/15 = 40
MP = 40/80*100 = 50
CP = 40/125*100 = 32
CP_15 = 15*32 ; CP_20 = 20*32 CP_35 = 1120
SP_20 = 50*20
SP_35 = 600 + 1000 = 1600
P is (1600 - 1120) = 480, Answer must be (C)
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Posts: 4
Easiest way to solve is 600/15=40 after discount price
Before discount price - 40/0.8=50
in first part profit per piece is 40-32=8
32 is calculated through as 40 is sp and cp is 40/1.25=32
Now profit is 8*15= 120
And In second part sp is 50 and profit is 18
18*20=360
Total p-360+120=480
Posted from my mobile device
Before discount price - 40/0.8=50
in first part profit per piece is 40-32=8
32 is calculated through as 40 is sp and cp is 40/1.25=32
Now profit is 8*15= 120
And In second part sp is 50 and profit is 18
18*20=360
Total p-360+120=480
Posted from my mobile device
p: price
c: cost
\(p * \frac{4}{5} * 15 = \frac{5}{4} * 15 * c\)
=> \(p * \frac{4}{5} = \frac{5}{4} * c\)
=> \(p = \frac{25c}{16}\)
\(p * \frac{4}{5} * 15 = 600\)
=> p * 12 = 600
=> p = 50
=> \(c = \frac{16p}{25} = 32\)
profit on day 1: \(\frac{1}{4} * 32 * 15 = 8 * 15 = 120\)
profit on day 2: (50 - 32) * 20 = 18 * 20 = 360
profit in 2 days: 120 + 360 = 480
c: cost
\(p * \frac{4}{5} * 15 = \frac{5}{4} * 15 * c\)
=> \(p * \frac{4}{5} = \frac{5}{4} * c\)
=> \(p = \frac{25c}{16}\)
\(p * \frac{4}{5} * 15 = 600\)
=> p * 12 = 600
=> p = 50
=> \(c = \frac{16p}{25} = 32\)
profit on day 1: \(\frac{1}{4} * 32 * 15 = 8 * 15 = 120\)
profit on day 2: (50 - 32) * 20 = 18 * 20 = 360
profit in 2 days: 120 + 360 = 480
HarshavardhanR
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The following solution is based on a well known fact, that the 25% increase and the 20% decrease are inverses, i.e. \(125\%*80\%=100\%\).
Day 1: Sale of 15 toys w/ discount
We invert the % changes and we find our unknowns:
Now, subtract the total cost from the total revenue to find the total profit:
Day 1: Sale of 15 toys w/ discount
- Day 1's revenue was $600 from selling 15 toys.
- The price per unit w/ discount is: \(\frac{\$600}{15}=\$40\).
- This is a 20% decrease from the price per unit (w/o discount).
- Also, it's a 25% increase from the cost per unit.
We invert the % changes and we find our unknowns:
- Price per unit \(= 125\% * \$40 = \$50\).
- Cost per unit \(= 80\% * \$40 = \$32\):
- On Day 2, he sold 20 toys at the marked price of $50 per unit.
- Day 2's revenue is \($50 * 20 = $1000\)
- Total revenue over two days: \(\$600 + \$1000 = \$1600\)
- Total cost for 15+20=35 toys: \(\$32 * 35 = \$1120\).
Now, subtract the total cost from the total revenue to find the total profit:
- Total Profit \(= \$1600 - \$1120 = \$480\)
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