A company sells two products, L and M. Last year, seventy

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BTGmoderatorDC: Moderator; Posts: 7187; Joined: Thu Sep 07, 2017 4:43 pm; Followed by:23 members

A company sells two products, L and M. Last year, seventy

by BTGmoderatorDC » Sun Jan 05, 2020 7:56 pm

A company sells two products, L and M. Last year, seventy percent of the units sold were product L, and the price of product L was 25 percent greater than the price of product M. Approximately what percent of the total revenue the company received last year was from the sale of product L?

A. 15%
B. 25%
C. 35%
D. 65%
E. 74%

OA E

Source: Official Guide

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Source: Beat The GMAT — Problem Solving | Sun Jan 05, 2020 7:56 pm

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Jay@ManhattanReview: GMAT Instructor; Posts: 3008; Joined: Mon Aug 22, 2016 6:19 am; Location: Grand Central / New York; Thanked: 470 times; Followed by:34 members

by Jay@ManhattanReview » Mon Jan 06, 2020 11:40 pm

BTGmoderatorDC wrote:A company sells two products, L and M. Last year, seventy percent of the units sold were product L, and the price of product L was 25 percent greater than the price of product M. Approximately what percent of the total revenue the company received last year was from the sale of product L?

A. 15%
B. 25%
C. 35%
D. 65%
E. 74%

OA E

Source: Official Guide

Say the total no. of units sold = 100; thus, no. of units of L sold = 70 and the no, of units of M sold = 30.

Again, say the cost of one unit of product M = $100; thus, the cost of one unit of product L = $125

Total revenue from the sale of 100 units = $125*70 + $100*30 = $11,750.

Total revenue from the sale of 70 units of L = $125*70 = $8,750.

Approximate percent of the total revenue received from the sale of product L = [8,750/11,750]*100% = ~74%

The correct answer: E

Hope this helps!

-Jay
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swerve: Legendary Member; Posts: 2499; Joined: Sun Oct 29, 2017 2:04 pm; Followed by:6 members

by swerve » Tue Jan 07, 2020 8:58 am

BTGmoderatorDC wrote:A company sells two products, L and M. Last year, seventy percent of the units sold were product L, and the price of product L was 25 percent greater than the price of product M. Approximately what percent of the total revenue the company received last year was from the sale of product L?

A. 15%
B. 25%
C. 35%
D. 65%
E. 74%

OA E

Source: Official Guide

Price of L =1.25 price of m
Let L be 70 and m=30
Let price for each unit of m =1 ,thus total from m=30
Total from l =1.25*70=87.5
Total revenue from both =117.50
Share of L = (87.50/117.50) * 100 =74.4

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8086; Joined: Sat Apr 25, 2015 10:56 am; Location: Los Angeles, CA; Thanked: 43 times; Followed by:29 members

by Scott@TargetTestPrep » Wed Jan 08, 2020 7:43 pm

BTGmoderatorDC wrote:A company sells two products, L and M. Last year, seventy percent of the units sold were product L, and the price of product L was 25 percent greater than the price of product M. Approximately what percent of the total revenue the company received last year was from the sale of product L?

A. 15%
B. 25%
C. 35%
D. 65%
E. 74%

OA E

Source: Official Guide

We can let the number of units of L and M sold last year be 7 and 3, respectively. We can also let the unit prices of L and M be $5 and $4, respectively. We see that the revenue from product L is 7 x 5 = $35 and
the total revenue is 35 + 3 x 4 = 35 + 12 = $47. Therefore, the revenue from product L is 35/47 â‰ˆ 74% of the total revenue.

Alternate Solution:

If the prices of L and M were equal, then precisely 70% of the revenue would be from product L. Since the price of L is actually greater than price of M, more than 70% of the revenue will be from product L. The only answer choice greater than 70 is E.

Answer: E

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