The purchase price of an article is $48. In order to include 15% of co

Question

The purchase price of an article is $48. In order to include 15% of cost for overhead and to provide $12 of net profit, the markup should be

A. 15%
B. 25%
C. 35%
D. 40%
E. 45%

Skywalker18 · Accepted Answer

Cost price of article = 48$
% of overhead cost = 15
Net profit = 12 $
We need to calculate % markup
Net profit as % of cost price = (12/48)*100 = 25%
Total markup should be = 25 + 15 = 40%

Answer D

abh007 · Answer

My Take:
Indeed it's D) 40 %

C.P. = $48
Overhead Cost = 15 %
Profit = $12
% profit = (12/48)*100 = 25 %
Total Markep = 15 + 25 = 40 %

2nd way :
Overhead = 48*(15/100) = 7.2
Profit = 12
Total Markup value = 7.2 + 12=19.2
% markup= (19.2/48)*100 = 40 %

ShashankDave · Answer

Is it just me or the language of the question is a bit confusing? 
15% of the cost would be included in the gross cost and then there would be a markup of some percent to get a net profit of $12. Or is it that this net profit is to be calculated as a percentage of the original purchase cost. This got me confused. Please help. And sorry if my question is silly.

stonecold · Answer

Excellent Question.

Here is what i did in this one =>

Price => $48

12% overhead => 12% of 48
10% of 48=4.8
5% of 48 = 2.4
12% of 48=7.2

Hence overhead add-on => $7.2

Now profit add-on => $12

Total add-on =>7.2+12=> $19.2

Let p be the required percentage.

Hence p/100 * 48=19.2
=192/48 *10 => 40%

SMASH THAT D.

MathRevolution · Answer

Purchase Price: $48

Include 15% of the cost for overhead:  \frac{115}{100} * 48 = $55.2

Provide $12 of net profit: $55.2 + 12 = $67.2

Marked price is up by:  \frac{67.2 - 48 }{ 48} * 100 = 40%

Answer D

joshuaa77 · Answer

I got confused with the wording as well in that I assumed the purchase price of 48 is the final price and includes the markups of 15% and 12 dollars. So the equation would look like this if x denoted the original price: 0.15x + 12 + x = 48.

Obviously this is wrong and you have to assume that the purchase price is the starting point to which you are looking to add those mark ups. Under that assumption, the question becomes incredibly simple.

DonBosco7 · Answer

15% of 48 = 7.2
profit = $12
CP = $48
profit = (SP-7.2) - CP .........  
12 = SP - 7.2 - 48
60 = SP - 7.2
SP = 67.2

question asks SP (also Markup Price) = ?% of CP
67.2 = x% of 48
solve for x you get 140%
i.e 40% Markup over cost
D

soniasw16 · Answer

May I know if such questions may still come up in GMAT Focus Edition? Wording here really confused me...

The purchase price of an article is $48. In order to include 15% of co

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