ACMEâ€™s manufacturing costs for sets of horseshoes include

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Mike@Magoosh: GMAT Instructor; Posts: 768; Joined: Wed Dec 28, 2011 4:18 pmFollowed by: 140 members; Location: Berkeley, CA; Thanked: 387 times

by Mike@Magoosh » Wed Sep 25, 2013 9:58 am

Solve this question without a calculator in under 90 seconds.

ACME's manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit?
(A) $20,874.25
(B) $30,943.25
(C) $41,308.50
(D) $51,817.50
(E) $53,624.25

For a discussion of the very important skill of estimation on the GMAT Quant, as well as the OA & solution to this particular problem, see:
https://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike

Magoosh GMAT Instructor
https://gmat.magoosh.com/

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Source: Beat The GMAT — Problem Solving | Wed Sep 25, 2013 9:58 am

sanjoy18: Senior | Next Rank: 100 Posts; Posts: 81; Joined: Tue Jun 11, 2013 10:24 pmFollowed by: 1 member; Thanked: 7 times

by sanjoy18 » Wed Sep 25, 2013 12:51 pm

profit=52.50*987 -(11450+19.75*987)

only challenge is calculation..lets simplified

profit= (52.5-19.75)*987 -11450
=32.75*987 -11450
=32.75 *(1000-13) -11450
= 32750 -11450 -32.75*13
=21300 - 32.75*13 (no need to calculate here..answer option are far apart)
looking at the answer it should be A

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rakeshd347: Master | Next Rank: 500 Posts; Posts: 391; Joined: Sat Mar 02, 2013 5:13 amFollowed by: 4 members; Thanked: 50 times

by rakeshd347 » Wed Sep 25, 2013 3:55 pm

Mike@Magoosh wrote:Solve this question without a calculator in under 90 seconds.

ACME's manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit?
(A) $20,874.25
(B) $30,943.25
(C) $41,308.50
(D) $51,817.50
(E) $53,624.25

For a discussion of the very important skill of estimation on the GMAT Quant, as well as the OA & solution to this particular problem, see:
https://magoosh.com/gmat/2012/the-power- ... mat-quant/

Mike

If you solve this problem with full multiplication then you wont be able to solve it in 2 minutes. I used approximation and answer should be A.
Make $20 per unit for production. And $50 per unit for sale. Then the profit is coming out to be 18000. But because we reduced the selling cost by $2 per unit and there are 987 so the only answer close to it is A.

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