lheiannie07 wrote:A dress was initially listed at a price that would have given the store a profit of 20% of the wholesale cost. What is the wholesale cost of the dress?
(1) After reducing the listed price by 10%, the dress sold for a net profit of 10$.
(2) The dress sold for 50$.
How can i identify the right statement in this? Can experts help me?
OA A
Hi,
What's the source of this question? Pl. specify. Statement 2 is wrong for two reasons. This is not a genuine GMAT question. Feel free to skip this one.
Let's take each statement one by one.
Say the wholesale cost is $x, thus the list price = x + 20% of x = 1.20*x
(1) After reducing the listed price by 10%, the dress sold for a net profit of 10$.
=> Selling price = List price - discount = 1.20x - 10% of 1.20x = 1.08x
=> Profit = 1.08x - x = 0.08x = 10 => x = 10/0.08 = 1000/8 = $125.
The wholesale cost of the dress = $125. Sufficient.
(2) The dress sold for 50$.
The problem with this statement is that if consider that the selling price = list price = $50 (assuming there is no discount; we cannot readily assume on the basis of Statement 1 that there must be some discount).
Thus, we have 1.20x = 50 => x = 50/1.20 = 500/12 = $41.67.
The wholesale cost of the dress = $41.67. Statement 2 seems sufficient, indicating the correct answer is D; however, it is not so.
The wholesale cost of the dress = $41.67 contradict the wholesale cost of the dress = $125, derived from Statement 1. Both must be the same. Either $41.67 or $125, but not both. This is against the principles of a genuine DS question.
A genuine DS question presents a scenario in which the question, Statement 1 and Statement 2 form a holistic situation; they cannot contradict each other.
Hope this helps!
-Jay
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