Target Test Prep 20% Off Flash Sale is on! Code: FLASH20

Redeem
Target Test Prep
5-Day Free Trial
5-day free, full-access trial TTP

Available with Beat the GMAT members only code

MORE DETAILS
Target Test Prep
Magoosh
Magoosh
Study with Magoosh GMAT prep

Available with Beat the GMAT members only code

MORE DETAILS
Magoosh

equation

This topic has expert replies
Post new topic Post Reply
Previous Topic Next Topic
Junior | Next Rank: 30 Posts
Posts: 27
Joined: Sat Jan 28, 2012 8:22 am
Followed by:1 members

equation

by klaud » Thu Mar 08, 2012 6:47 am
A small business invests $9,900 in equipment to produce a product. Each unit of the product costs $0.65 to produce and is sold for $1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000
Top

GMAT/MBA Expert

User avatar
GMAT Instructor
Posts: 16207
Joined: Mon Dec 08, 2008 6:26 pm
Location: Vancouver, BC
Thanked: 5254 times
Followed by:1268 members
GMAT Score:770

by Brent@GMATPrepNow » Thu Mar 08, 2012 7:41 am
klaud wrote:A small business invests $9,900 in equipment to produce a product. Each unit of the product costs $0.65 to produce and is sold for $1.20. How many units of the product must be sold before the revenue received equals the total expense of production, including the initial investment in equipment?

A. 12,000
B. 14,500
C. 15,230
D. 18,000
E. 20,000
Let's begin by writing a "word equation"
We want: revenue received = total expense of production

Let x = the number of units produced and sold.

Revenue received = 1.2x

Total expenses = initial investment + $0.65 per unit
= 9900 + 0.65x

So, we get the equation: 1.2x = 9900 + 0.65x

When we solve this for x, we get x=18000

So the answer is D

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
Image
Top
Junior | Next Rank: 30 Posts
Posts: 27
Joined: Sat Jan 28, 2012 8:22 am
Followed by:1 members

by klaud » Thu Mar 08, 2012 8:30 am
I solved this problem in this way:

1,20-0,65= 0,55

the difference between cost and revenue of each product MUST cover the fixed costs.

9,900:0,55=18,000
Last edited by klaud on Thu Mar 08, 2012 8:40 am, edited 2 times in total.
Top

GMAT/MBA Expert

User avatar
GMAT Instructor
Posts: 16207
Joined: Mon Dec 08, 2008 6:26 pm
Location: Vancouver, BC
Thanked: 5254 times
Followed by:1268 members
GMAT Score:770

by Brent@GMATPrepNow » Thu Mar 08, 2012 8:34 am
klaud wrote:I solved this problem in this way:

1,20-0,65= 0,55
9,900:0,55=18,000
I think our solutions are identical, except I may have explained a few more pieces :-)

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
Image
Top
Post new topic Post Reply
• Page 1 of 1