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ramkryp
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C
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45% (medium)

Question Stats:

86% (02:24) correct 14% (03:02) wrong based on 7 sessions

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A whole-seller allows a discount of 20% on the list price to a retailer. The retailer sells at 5% discount on the list price. If the customer paid $38 for an article, what profit is made by the retailer ?
a. $10
b. $8
c. $6
d. $12

How to do this ?



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C
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gmat1220
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Cost and profit 19 May 2011, 21:01
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Let the list price be x

Cp to retailer = 0.8 x
Sp retailer = 0.95 x

Profit = 0.15 x

We know that customer paid $38. hence 0.95x = 38 and x = 40

Profit = 0.15 * 40 = $6

ramkryp
A whole-seller allows a discount of 20% on the list price to a retailer. The retailer sells at 5% discount on the list price. If the customer paid $38 for an article, what profit is made by the retailer ?
a. $10
b. $8
c. $6
d. $12

How to do this ?
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ramkryp
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Cost and profit 19 May 2011, 21:17
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Thanks :)
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Cost and profit 19 May 2011, 21:18
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retailer's SP = 0.95 LP = 38
LP = 40

retailer's CP = 0.8 LP = discounted price from the whole sailer = 32

Profit = 0.95 LP - 0.8 LP = 38 - 32 = 6
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Cost and profit 21 May 2011, 14:32
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whole sale person's selling price = retailers cost price = (80/100)(LP)

retailers selling price = (95/100)LP

=> profit = (15/100)*LP equation1

also given that (95/100)LP = 38 eqution2

substituting 2 in 1 we have
profit = 6
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The customer pays $95 when the list price is $ 100

Therefore the list price of the article when the customer pays $ 38 = 100 * 38/95 = $ 40

The retailer got it from the wholesaler after 20% discount

So the cost price of the article to the retailer = 0.8 * 40 = $ 32

Hence profit = SP - CP = $6
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Cost and profit 25 May 2011, 07:07
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Step 1:

Let the list price be x

So, the retailer sells the product @ 5% discount on the list price
The selling price is 38

=> 0.95x = 38
=> x=38/0.95=40


Step 2:

But the wholesaler sells the product to the retailer @ 20% discount on the list price
So the cost price to the retailer is:

0.8*40=32


Step 3:
So, the profit to the retailer is SP-CP = 38-32 = 6

Option (C) is the right answer.
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