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The manufacturer’s suggested retail price (MSRP) of a certain item is

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The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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30 Sep 2014, 08:14
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63% (01:34) correct 37% (01:36) wrong based on 298 sessions

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The manufacturer’s suggested retail price (MSRP) of a certain item is $60. Store A sells the item for 20 percent more than the MSRP. The regular price of the item at Store B is 30 percent more than the MSRP, but the item is currently on sale for 10 percent less than the regular price. If sales tax is 5 percent of the purchase price at both stores, what is the result when the total cost of the item at Store B is subtracted from the total cost of the item at Store A? A.$0
B. $0.63 C.$1.80
D. $1.89 E.$2.10
[Reveal] Spoiler: OA

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Re: The manufacturer’s suggested retail price (MSRP) of a certain item [#permalink]

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30 Sep 2014, 18:56
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MSRP = 60

Price at Store A $$= 60 * \frac{120}{100} = 72$$

Price at Store B $$= 60 * \frac{130}{100} * \frac{90}{100} = 70.2$$

Difference = 72.0 - 70.2 = 1.8

Sales tax applicable = 5% on both

= 1.8 + 0.09 = 1.89

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Re: The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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26 Jan 2016, 00:34
Bunuel wrote:
The manufacturer’s suggested retail price (MSRP) of a certain item is $60. Store A sells the item for 20 percent more than the MSRP. The regular price of the item at Store B is 30 percent more than the MSRP, but the item is currently on sale for 10 percent less than the regular price. If sales tax is 5 percent of the purchase price at both stores, what is the result when the total cost of the item at Store B is subtracted from the total cost of the item at Store A? A.$0
B. $0.63 C.$1.80
D. $1.89 E.$2.10

This question is almost same, except for the last part of the question. Source: ManhattanPrep
The manufacturer’s suggested retail price (MSRP) of a certain item is $60. Store A sells the item for 20 percent more than the MSRP. The regular price of the item at Store B is 30 percent more than the MSRP, but the item is currently on sale for 10 percent less than the regular price. If sales tax is 5 percent of the purchase price at both stores, how much more will someone pay in sales tax to purchase the item at Store A? A)$0
B)$0.09 C)$0.18
D)$0.30 E)$1.80
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Joined: 20 Aug 2015
Posts: 11
GMAT 1: 710 Q49 V37
The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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05 Apr 2016, 19:17
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Sash143 wrote:
Bunuel wrote:
The manufacturer’s suggested retail price (MSRP) of a certain item is $60. Store A sells the item for 20 percent more than the MSRP. The regular price of the item at Store B is 30 percent more than the MSRP, but the item is currently on sale for 10 percent less than the regular price. If sales tax is 5 percent of the purchase price at both stores, what is the result when the total cost of the item at Store B is subtracted from the total cost of the item at Store A? A.$0
B. $0.63 C.$1.80
D. $1.89 E.$2.10

This question is almost same, except for the last part of the question. Source: ManhattanPrep
The manufacturer’s suggested retail price (MSRP) of a certain item is $60. Store A sells the item for 20 percent more than the MSRP. The regular price of the item at Store B is 30 percent more than the MSRP, but the item is currently on sale for 10 percent less than the regular price. If sales tax is 5 percent of the purchase price at both stores, how much more will someone pay in sales tax to purchase the item at Store A? A)$0
B)$0.09 C)$0.18
D)$0.30 E)$1.80

The last part asks to calculate the difference in sales tax amount i.e [ 5% of purchase price at store A - 5% of purchase price at store B ]
After basic calculations one can easily find the purchase prices at store A and B.

The purchase price at store A = 72
Sales tax amount at store A = 5% of 72 = 3.60
The purchase price at store B = 70.2
Sales tax amount at store B = 5% of 70.2 = 3.51
5% of purchase price at store A - 5% of purchase price at store B = 3.60-3.51 = 0.09 (Ans)
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Re: The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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05 Apr 2016, 23:45
Bunuel wrote:
The manufacturer’s suggested retail price (MSRP) of a certain item is $60. Store A sells the item for 20 percent more than the MSRP. The regular price of the item at Store B is 30 percent more than the MSRP, but the item is currently on sale for 10 percent less than the regular price. If sales tax is 5 percent of the purchase price at both stores, what is the result when the total cost of the item at Store B is subtracted from the total cost of the item at Store A? A.$0
B. $0.63 C.$1.80
D. $1.89 E.$2.10

Since everything increases/decreases in percentage terms, another method is to assume price as 100 and then multiply the final answer by 3/5 to adjust for 60.

Store A price = 100 + 20 = 120
Store B price = 100 + 30 - 13 = 117

Difference after incorporating sales tax and adjusting for 60 = 3 * (105/100) ( 3/5) = 189/100 = $1.89 Answer (D) _________________ Karishma Veritas Prep | GMAT Instructor My Blog Get started with Veritas Prep GMAT On Demand for$199

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The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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07 Aug 2016, 06:28
Hi Bunuel, VeritasprepKarishma,

I did not understand this part of the question: "what is the result when the total cost of the item at Store B is subtracted from the total cost of the item at Store A?" What is the 'total cost' referring to?
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Re: The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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07 Aug 2016, 06:54
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pallaviisinha wrote:
Hi Bunuel, VeritasprepKarishma,

I did not understand this part of the question: "what is the result when the total cost of the item at Store B is subtracted from the total cost of the item at Store A?" What is the 'total cost' referring to?

Total cost here is referring to the final price of A and B after applying the sales/taxes.
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Intern
Joined: 17 Jan 2015
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Location: India
GMAT 1: 620 Q42 V34
GMAT 2: 710 Q49 V38
Re: The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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07 Aug 2016, 07:00
Thank you, abhimahna. I guess I was confusing it with cost price.
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Re: The manufacturer’s suggested retail price (MSRP) of a certain item is [#permalink]

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15 Nov 2017, 07:59
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Re: The manufacturer’s suggested retail price (MSRP) of a certain item is   [#permalink] 15 Nov 2017, 07:59
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