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05 Oct 2016, 09:52
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B
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Difficulty:
95%
(hard)
Question Stats:
39% (02:55) correct
61%
(02:33)
wrong
based on 150
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Last month, all units of product X produced by a certain company sold out and the company's total cost were equal to $90000 plus 10 percent of the company's total revenue from all units of product X sold. If the company made a profit on product X last month , was the unit price of product X sold greater than $5 ?
(1) The company’s total costs of all units of X product sold were $120,000.
(2) The number of all Units of product X sold last month is less than 20000.
(1) The company’s total costs of all units of X product sold were $120,000.
(2) The number of all Units of product X sold last month is less than 20000.
05 Oct 2016, 10:48
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Rev-cost=profit
They key to solving this problem is knowing that a profit was made!
Cost was $90,000 plus 10% of the revenue. Was each unit more than $5?
1. The company’s total costs of all units of X product sold were $120,000.
From statement one we get that 30,000 is 10% of the total revenue so the revenue is 300,000. This means that we have $180,000 in profit but we have no idea about the units sold.
2. The number of all Units of product X sold last month is less than 20000.
Lets assume that the number of products sold last month was 20,000 and each unit cost $5. By doing this we're maxing out the number of units possible to be sold. This means that we have $100,000 in revenue. We know from the prompt that the cost is $90,000 plus 10% of the revenue. So our costs is $100,000. The prompt states that there was a profit, so we know that the price of the unit MUST be greater than $5.
B
They key to solving this problem is knowing that a profit was made!
Cost was $90,000 plus 10% of the revenue. Was each unit more than $5?
1. The company’s total costs of all units of X product sold were $120,000.
From statement one we get that 30,000 is 10% of the total revenue so the revenue is 300,000. This means that we have $180,000 in profit but we have no idea about the units sold.
2. The number of all Units of product X sold last month is less than 20000.
Lets assume that the number of products sold last month was 20,000 and each unit cost $5. By doing this we're maxing out the number of units possible to be sold. This means that we have $100,000 in revenue. We know from the prompt that the cost is $90,000 plus 10% of the revenue. So our costs is $100,000. The prompt states that there was a profit, so we know that the price of the unit MUST be greater than $5.
B
General Discussion
ShankSouljaBoi
Joined: 21 Jun 2017
Last visit: 17 Apr 2024
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Location: India
Concentration: Finance, Economics
Schools: Rotman '23 (D) IIMA PGPX'22 (D) Desautels '23 (D) Schulich Sept '23 (D) WBS (D) IIML IPMX'25 (A)
GMAT 1: 660 Q49 V31
GMAT 2: 620 Q47 V30
GMAT 3: 650 Q48 V31
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WE:Corporate Finance (Non-Profit and Government)
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Schools: Rotman '23 (D) IIMA PGPX'22 (D) Desautels '23 (D) Schulich Sept '23 (D) WBS (D) IIML IPMX'25 (A)
GMAT 3: 650 Q48 V31
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01 Nov 2019, 14:20
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+1 q
elt x be cost per unit and y be the quantity sold. R be revenue = xy and C be cost of production
C= 90000 + 0.1xy. Profit has been made so
revenue > cost
xy> 90000+0.1xy
x>(10^5)/y
Restating question is x> 5 or 10^5/y > 5 or is y< 20000 ?
Straight B
elt x be cost per unit and y be the quantity sold. R be revenue = xy and C be cost of production
C= 90000 + 0.1xy. Profit has been made so
revenue > cost
xy> 90000+0.1xy
x>(10^5)/y
Restating question is x> 5 or 10^5/y > 5 or is y< 20000 ?
Straight B
