AAPL wrote:Princeton Review
A department store receives a shipment of 1,000 shirts, for which it pays $9,000. The store sells the shirts at a price 80 percent above cost for one month, after which it reduces the price of the shirts to 20 percent above cost. The store sells 75 percent of the shirts during the first month and 50 percent of the remaining shirts afterward. How much gross income did sales of the shirts generate?
A. $10,000
B. $10,800
C. $12,150
D. $13,500
E. $16,200
We are given that a department store receives a shipment of 1,000 shirts, for which it pays $9,000. Thus, the cost per shirt is 9 dollars.
Since the store sells the shirts at a price 80 percent above cost for one month, the selling price for that month is 1.8 x 9 = $16.20. Since 75 percent of the shirts, or 0.75 x 1,000 = 750 shirts, are sold during this month, the revenue earned is 750 x 16.2 = $12,150.
After that month, 50% of the remaining shirts, or 0.5 x 250 = 125 shirts, are sold at a cost of 1.2 x 9 = $10.80. The revenue earned from the sale of these shirts is 125 x 10.8 = $1,350.
Thus, the gross income earned was $12,150 + $1,350 = $13,500.
Answer: D
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