Gross Profit!!

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Ozlemg: Master | Next Rank: 500 Posts; Posts: 407; Joined: Tue Jan 25, 2011 9:19 amFollowed by: 7 members; Thanked: 25 times

by Ozlemg » Sat Jul 23, 2011 2:07 am

A merchant purchased a jacket for $60 and then determined a selling price that equalled the purchase price of the jacket plus a markup that was 25 percent of the selling price. During a sale, the merchant discounted the selling price by 20 percent and sold the jacket. What was the merchant's gross profit on this sale?
(A) $0
(B) $3
(C) $4
(D) $12
(E) $15

The more you suffer before the test, the less you will do so in the test!

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Source: Beat The GMAT — Problem Solving | Sat Jul 23, 2011 2:07 am

winniethepooh: Master | Next Rank: 500 Posts; Posts: 370; Joined: Sat Jun 11, 2011 8:50 pmFollowed by: 2 members; Location: Arlington, MA.; Thanked: 27 times

by winniethepooh » Sat Jul 23, 2011 2:20 am

the Cost price of the item is $60.
The selling price initially is 25 percent of selling price.
Let selling price be 100, so the cost price will be 100 - 25 = 75

Equate 75 with $60 that will give 100 to be $80(the selling price at 25 % markup)

Now, during a sale the jacket currently at $80 is sold at a discount of 20% = $80 - 20 % = $64.

Merchant's gross profit = $4.

Hence, C.

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Ozlemg: Master | Next Rank: 500 Posts; Posts: 407; Joined: Tue Jan 25, 2011 9:19 amFollowed by: 7 members; Thanked: 25 times

by Ozlemg » Sat Jul 23, 2011 2:37 am

winniethepooh wrote:the Cost price of the item is $60.
The selling price initially is 25 percent of selling price.Let selling price be 100, so the cost price will be 100 - 25 = 75

Equate 75 with $60 that will give 100 to be $80(the selling price at 25 % markup)

Now, during a sale the jacket currently at $80 is sold at a discount of 20% = $80 - 20 % = $64.

Merchant's gross profit = $4.

Hence, C.

Thank you. OA is also C.

This is my fault, my interpretation of the Q was wrong. I got it know.

60+X= 0.25*(60+X)--> this is the key part!!

The more you suffer before the test, the less you will do so in the test!

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