ACME's manufacturing costs for sets of horseshoes include at $11,450 initial outlay, and $19,75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sales 987 sets of horseshoes, what was their profit?
A. $20,874.25
B. $30,943.25
C. $41,308.50
D. $51,817.50
E. $53,624.25
The OA is A.
I solved this PS question as follows,
Approximations
19.75 = 20.00
52.50 = 50.00
987 = 1000
Initial cost = 20*1000 + 11450 = 31450
Selling = 50 * 1000 = 50000
Profit = 50000 - 31450 = 19000, close to 20000 Option A.
Has anyone another approach to solve this PS question? Regards!
ACME’s manufacturing costs for sets of horseshoes include
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That's a great solution.AAPL wrote:ACME's manufacturing costs for sets of horseshoes include at $11,450 initial outlay, and $19,75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sales 987 sets of horseshoes, what was their profit?
A. $20,874.25
B. $30,943.25
C. $41,308.50
D. $51,817.50
E. $53,624.25
The OA is A.
I solved this PS question as follows,
Approximations
19.75 = 20.00
52.50 = 50.00
987 = 1000
Initial cost = 20*1000 + 11450 = 31450
Selling = 50 * 1000 = 50000
Profit = 50000 - 31450 = 19000, close to 20000 Option A.
Has anyone another approach to solve this PS question? Regards!
Here's a slight twist:
It COSTS $19.75 per set, and each set is SOLD for $52.50
So, the company makes approximately $33 per set ($52.50 - $19.75 ≈ $33)
The company sold 987 sets.
So, the profit ≈ ($33)(1000) ≈$33,000
Keep in mind, that there's also the initial outlay of $11,450
So, the TOTAL PROFIT ≈$33,000 - $11,450
≈ $21,500
The best (closest) answer is A
Cheers,
Brent
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- Scott@TargetTestPrep
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The profit is:AAPL wrote:ACME's manufacturing costs for sets of horseshoes include at $11,450 initial outlay, and $19,75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sales 987 sets of horseshoes, what was their profit?
A. $20,874.25
B. $30,943.25
C. $41,308.50
D. $51,817.50
E. $53,624.25
987(52.50) - [11,450 + 987(19.75)]
987(52.50) - 11,450 - 987(19.75)
987(52.50 - 19.75) - 11,450
987(32.75) - 11,450
At this point, we will approximate 987 as 1,000 and 32.75 as 32. So the approximate total profit is:
1,000(32) - 11,450
32,000 - 11,450
20,550
Alternate Solution:
Let's round all the numbers. From the final statement of the problem, we know we'll sell about 1,000 sets. The initial outlay is about 12,000 and production costs are about (20) (1000) = 20,000. Thus, costs are about 32,000. Revenue is a bit greater than (50)(1000) = 50,000. Thus, revenue - cost = 50,000 - 32,000 = 18,000. Thus, profit is a bit greater than $18,000.
Answer: A
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