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A toy store's gross profit on a computer game was 10%...

This topic has 1 expert reply and 0 member replies

A toy store's gross profit on a computer game was 10%...

Post Sat Feb 24, 2018 5:50 am
A toy store's gross profit on a computer game was 10% of the cost of the game. If the store increased the selling price of the game from $44 to $46 and the cost of the game remained the same, then the store's gross profit on the game after the price increase was what percent of the cost of the game?

A. 10.5%
B. 11%
C. 12.5%
D. 13%
E. 15%

The OA is E.

Please, can any expert explain this PS question for me? I can't get the correct answer. I need your help. Thanks.

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GMAT/MBA Expert

Post Sat Feb 24, 2018 6:43 am
swerve wrote:
A toy store's gross profit on a computer game was 10% of the cost of the game. If the store increased the selling price of the game from $44 to $46 and the cost of the game remained the same, then the store's gross profit on the game after the price increase was what percent of the cost of the game?

A. 10.5%
B. 11%
C. 12.5%
D. 13%
E. 15%
A toy store's gross profit on a computer game was 10% of the cost of the game.
The store increased the selling price of the game from $44.

Since $44 yields 10% profit -- and 44 is 10% more than 40 -- the cost price of the game = 40.

If the store increased the selling price of the game to $46 and the cost of the game remained the same, then the store's gross profit on the game after the price increase was what percent of the cost of the game?
Profit = (new selling price) - (cost price) = 46-40 = 6.
Profit percentage = (profit/cost) * 100 = (6/40) * 100 = 15.

The correct answer is E.

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