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
OA A
Source: Magoosh
ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell
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Solution:BTGmoderatorDC wrote: ↑Fri Jul 17, 2020 9:38 pmACME’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
OA A
The revenue from selling 987 sets of horseshoes is (987 x 52.5) dollars, and the cost of producing the same number of sets of horseshoes is (987 x 19.75 + 11,450) dollars. Therefore, the profit is:
(987 x 52.5)  (987 x 19.75 + 11,450) = 987 x (52.5  19.75)  11,450
From here on, we will just approximate the above as:
1000 x 32  11,500
32,000  11,500
20,500
We see that choice A is closest to this estimate. Therefore, choice A is the correct answer.
Answer: A
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ApproximationsBTGmoderatorDC wrote: ↑Fri Jul 17, 2020 9:38 pmACME’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
OA A
Source: Magoosh
\(19.75 = 20.00\)
\(52.50 = 50\)
\(987 = 1000\)
Initial cost \(= 20\cdot 1000 + 11450 = 31450\)
Selling \(= 50 \cdot 1000 = 50000\)
Profit \(= 50000  31450 = 19000\)
Close to \(20k\)
Therefore, A
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Here's a slight twist:BTGmoderatorDC wrote: ↑Fri Jul 17, 2020 9:38 pmACME’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
OA A
Source: Magoosh
It COSTS $19.75 per set, and each set is SOLD for $52.50
So, the company makes approximately $33 per set ($52.50  $19.75 ≈ $33)
The company sold 987 sets.
So, the profit ≈ ($33)(1000) ≈$33,000
Keep in mind, that there's also the initial outlay of $11,450
So, the TOTAL PROFIT ≈$33,000  $11,450
≈ $21,500
The best (closest) answer is A
Cheers,
Brent