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28 Nov 2024, 15:33
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Shipping from Supplier A: $125
Shipping from Supplier B: $725
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
80% (02:25) correct
20%
(02:32)
wrong
based on 502
sessions
History
Date
Time
Result
Not Attempted Yet
You have the option to order wallboard from either of two suppliers with the same basic price per four-by-eight-foot sheet of wallboard. Supplier A is located in state and must apply the 6% state sales tax to your order. Supplier B ships from out of state, where no sales tax applies to orders for construction materials. Because of the distance, Supplier B charges more for shipping than Supplier A charges. If an order totaling $10,000 before tax and shipping costs results in the same charge from either supplier, find each supplier’s shipping cost for such an order.
| Shipping from Supplier A | Shipping from Supplier B | |
| $85 | ||
| $125 | ||
| $325 | ||
| $450 | ||
| $600 | ||
| $725 |
ShowHide Answer
Official Answer
Shipping from Supplier A: $125
Shipping from Supplier B: $725
29 Nov 2024, 11:00
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1. Let's create a general formula for the total cost: Total Cost = Order Cost \(*\) (1 + State Sales Tax(%)) + Shipping Cost.
2. Now we can use it for both suppliers.
- Supplier A: Total Cost = 10000 \(*\) 1.06 + Shipping Cost(A)
- Supplier B: Total Cost = 10000 \(*\) 1 + Shipping Cost(B)
3. Lastly, it is known that the Total Cost is the same. So: 10000 \(*\) 1.06 + Shipping Cost(A) = 10000 \(*\) 1 + Shipping Cost(B) \(\rightarrow\) Shipping Cost(B) - Shipping Cost (A) = 600.
4. The only options that have a difference of 600 are $725 and $125.
5. Our answer will be: Shipping from Supplier A - $125 and Shipping from Supplier B - $725.
2. Now we can use it for both suppliers.
- Supplier A: Total Cost = 10000 \(*\) 1.06 + Shipping Cost(A)
- Supplier B: Total Cost = 10000 \(*\) 1 + Shipping Cost(B)
3. Lastly, it is known that the Total Cost is the same. So: 10000 \(*\) 1.06 + Shipping Cost(A) = 10000 \(*\) 1 + Shipping Cost(B) \(\rightarrow\) Shipping Cost(B) - Shipping Cost (A) = 600.
4. The only options that have a difference of 600 are $725 and $125.
5. Our answer will be: Shipping from Supplier A - $125 and Shipping from Supplier B - $725.
08 Jan 2026, 05:40
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Automated notice from GMAT Club BumpBot:
A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.
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A member just gave Kudos to this thread, showing it’s still useful. I’ve bumped it to the top so more people can benefit. Feel free to add your own questions or solutions.
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