abhi.jain wrote:A store purchased 20 coats that each cost an equal amount and then sold each of the 20 coats at an equal price. What was the store's gross profit on the 20 coats?
1) If the selling price per coat had been twice as much, the store's gross profit on the 20 coats would have been $2400.
2) If the selling price per coat has bee $2 more, the store's gross profit on the 20 coats would have bee $440.
I don't know why, but the first 3 times I read this question I thought the store was selling cats! I don't even like cats!
Nonetheless, let's attack the question:
Step 1 of the Kaplan Method for DS: Analyze the Stem
We want the gross profit, which is a number - so, we have a value question. For a statement to be sufficient, it must give us the exact amount of gross profit.
Gross Profit = selling price - cost
So, to calculate profit it looks like we need the selling price and the cost (or the dollar mark up per coat).
Step 2 of the Kaplan Method for DS: Evaluate the Statements
(1) if you double selling price, gross profit = 2400, or:
2400 = 2(20)s - 20c
(s = selling price of 1 coat, c = cost of 1 coat)
combining this with:
GP = 20s - 20c
we have 2 equations and 3 unknowns, with no way to eliminate both "s" and "c". Insufficient.
(2) if you increase selling price by $2, GP = $440, or:
440 = 20(s+2) - 20c
440 = 20s - 20c + 40
400 = 20s - 20c
Well, since GP = 20s - 20c, we just determined that GP=400... sufficient.
If we're on the ball, we can deal with (2) intuitively rather than algebraically: if you increase selling price by $2/coat for 20 coats, you generate an extra $40 of profit. Since our new profit is 440, the profit before the increase must be 440-40=400.
(2) is sufficient, (1) isn't: choose B!
