A craftsman sold his identical handcrafted items at a profit of 20 percent. Had he charged 20 percent more per item, his profit per item would have been $9.6 more. What price did he charge, in dollars, for each item?
A. 24
B. 28.8
C. 40
D. 48
E. 57.6
OA D
Source: e-GMAT
A craftsman sold his identical handcrafted items at a profit
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We can let r = revenue (or sale price) and c = cost.BTGmoderatorDC wrote:A craftsman sold his identical handcrafted items at a profit of 20 percent. Had he charged 20 percent more per item, his profit per item would have been $9.6 more. What price did he charge, in dollars, for each item?
A. 24
B. 28.8
C. 40
D. 48
E. 57.6
OA D
Source: e-GMAT
Since profit = revenue - cost, his (original) profit would be (r - c). We are given that had the craftsman charged 20 percent more per item, his profit would have been $9.60 more. His new profit would be (1.2r - c), or (r - c + 9.6). Therefore:
1.2r - c = r - c + 9.6
0.2r = 9.6
2r = 96
r = 48
Answer: D
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