A company sells two products, L and M. Last year, seventy

BTGmoderatorDC wrote:A company sells two products, L and M. Last year, seventy percent of the units sold were product L, and the price of product L was 25 percent greater than the price of product M. Approximately what percent of the total revenue the company received last year was from the sale of product L?

A. 15%
B. 25%
C. 35%
D. 65%
E. 74%

OA E

Source: Official Guide

Say the total no. of units sold = 100; thus, no. of units of L sold = 70 and the no, of units of M sold = 30.

Again, say the cost of one unit of product M = $100; thus, the cost of one unit of product L = $125

Total revenue from the sale of 100 units = $125*70 + $100*30 = $11,750.

Total revenue from the sale of 70 units of L = $125*70 = $8,750.

Approximate percent of the total revenue received from the sale of product L = [8,750/11,750]*100% = ~74%

The correct answer: E

Hope this helps!

-Jay
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BTGmoderatorDC wrote:A company sells two products, L and M. Last year, seventy percent of the units sold were product L, and the price of product L was 25 percent greater than the price of product M. Approximately what percent of the total revenue the company received last year was from the sale of product L?

A. 15%
B. 25%
C. 35%
D. 65%
E. 74%

OA E

Source: Official Guide

We can let the number of units of L and M sold last year be 7 and 3, respectively. We can also let the unit prices of L and M be $5 and $4, respectively. We see that the revenue from product L is 7 x 5 = $35 and
the total revenue is 35 + 3 x 4 = 35 + 12 = $47. Therefore, the revenue from product L is 35/47 ≈ 74% of the total revenue.

Alternate Solution:

If the prices of L and M were equal, then precisely 70% of the revenue would be from product L. Since the price of L is actually greater than price of M, more than 70% of the revenue will be from product L. The only answer choice greater than 70 is E.

Answer: E