Problem Solving

NandishSS wrote:Jack gave 20% discount on sale of 15 toys & generated revenue of 600$. He earned 25% profit on this sale. Next day he sold 20 toys without any discount. what is his gross profit in two days?

a) 240 $
b) 360 $
c) 480 $
d) 510 $
e) 550 $

OA: C

Source: Expert's Global practice test

Since $600 is the discounted price after a discount of 20%, we have 80% of MRP = 600. Thus, MRP of 15 toys = 600/80% = $750

Thus, MRP of one toy = $750/15 = $50.

Since Jack earned 25% profit, 125% of Cost = $600. Thus, Cost of 15 toys = $600/125% = $480. Cost per toy = 480/15 =$32

Profit on sale of 15 toys = Sale value - Cost price = 600 - 15*32 = 600 - 480 = $120

Next day scenario:

Sale price of 20 toys = 20*MRP = 20*50 = $1000
Cost price of 20 toys = 20*Cost = 20*32 = $640

Profit = Sale value - Cost price = 1000 - 640 = $360

Total profit = Profit on day 1 + Profit next day = $120 + $360 = $480.

The correct answer: C

Hope this helps!

-Jay
_________________
Manhattan Review GMAT Prep

Locations: Pasadena | Warsaw | Cairo | Kuala Lumpur | and many more...

Schedule your free consultation with an experienced GMAT Prep Advisor! Click here.

NandishSS wrote:Jack gave 20% discount on sale of 15 toys & generated revenue of 600$. He earned 25% profit on this sale. Next day he sold 20 toys without any discount. what is his gross profit in two days?

a) 240 $
b) 360 $
c) 480 $
d) 510 $
e) 550 $

OA: C

Source: Expert's Global practice test

We let P = the profit for the first transaction and C = the cost of the toys for the first transaction. Recalling that Revenue - Cost = Profit, we can create the equation:

P = 0.25C

600 - C = 0.25C

600 = 1.25C

480 = C

So his profit for the first day was 600 - 480 = $120, and each toy cost Jack 480/15 = $32. Since he sold each toy for 600/15 = $40, which was discounted 20% from the original selling price, the original selling price was 40/0.8 = $50.

Therefore, when he sold 20 toys the following day at the original selling price, he made a total 50 x 20 = $1000, and the total cost was 32 x 20 = $640.

Therefore, his profit on the second day was 1000 - 640 = $360, and his total profit for the two days was 120 + 360 = $480.

Answer: C