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Since revenue - cost = profit and we want the profit to be at least $1,000, we can now determine the minimum value of x using the following inequality: 60x - (40x + 3,000) â‰¥ 1000 60x - 40x - 3,000 â‰¥ 1000 20x - 3,000 â‰¥ 1000 20x â‰¥ 4000 x â‰¥ 200 Answer: A ### GMAT/MBA Expert Matt@VeritasPrep GMAT Instructor Joined 12 Sep 2012 Posted: 2637 messages Followed by: 114 members Upvotes: 625 Target GMAT Score: V51 GMAT Score: 780 Mon Jun 05, 2017 11:39 pm Costs:$40 per item + $3000 Profits:$60 per item

If our guy sells x items and makes $1000, we know that Profits - Costs =$1000

60x - (40x + 3000) = 1000

20x - 3000 = 1000

20x = 4000

x = 200

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### GMAT/MBA Expert

Brent@GMATPrepNow GMAT Instructor
Joined
08 Dec 2008
Posted:
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Mon Jun 05, 2017 5:12 am
vaibhav101 wrote:
The manufacturer of a certain item can sell all he can produce at the selling price of $60 each. It costs him$40 in materials and labour to produce each item and he has overhead expenses of $3000 per week in order to operate the plant. The minimum number of units that he should produce and sell in order to make profit of at least$1000 per week, is
A 200
B 250
C 300
D 400
E 500
Let x = the number of units produced in 1 week.

It costs him $40 in materials and labour to produce each item and he has overhead expenses of$3000 per week in order to operate the plant.
TOTAL EXPENSES for 1 week = 40x + 3000

The manufacturer of a certain item can sell all he can produce at the selling price of $60 each. So, the manufacturer will sell x units at$60 apiece
TOTAL REVENUE for 1 week = 60x

PROFIT = 60x - ( 40x + 3000)
= 20x - 3000

The minimum number of units that he should produce and sell in order to make profit of at least $1000 per week, is We can write the equation: 20x - 3000 = 1000 Add 3000 to both sides: 20x = 4000 Solve: x = 200 Answer: A _________________ Brent Hanneson â€“ Founder of GMATPrepNow.com Use our video course along with Check out the online reviews of our course Come see all of our free resources GMAT Prep Now's comprehensive video course can be used in conjunction with Beat The GMATâ€™s FREE 60-Day Study Guide and reach your target score in 2 months! ### GMAT/MBA Expert Rich.C@EMPOWERgmat.com Elite Legendary Member Joined 23 Jun 2013 Posted: 9309 messages Followed by: 478 members Upvotes: 2867 GMAT Score: 800 Mon Jun 05, 2017 10:22 am Hi vaibhav101, This question can be solved by TESTing THE ANSWERS. We're told that each unit costs$40 to produce and will be sold for $60. In addition, the production plant costs$3,000 per week to operate. We're asked for the minimum number of units that must be produced in one week to net at least a $1,000 profit. Let's TEST Answer B: 250 units 250 units would net$20/profit each...
(250)($20) =$5,000
After subtracting the $3,000 needed to run the plant, we have...$5,000 - $3,000 =$2,000
This is higher than what we were asked for, so 250 units is clearly too many to produce the minimum profit we were after. There's only one answer left that 'fits'

GMAT assassins aren't born, they're made,
Rich

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### GMAT/MBA Expert

Jay@ManhattanReview GMAT Instructor
Joined
22 Aug 2016
Posted:
1026 messages
Followed by:
22 members
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Mon Jun 05, 2017 9:15 pm
vaibhav101 wrote:
The manufacturer of a certain item can sell all he can produce at the selling price of $60 each. It costs him$40 in materials and labour to produce each item and he has overhead expenses of $3000 per week in order to operate the plant. The minimum number of units that he should produce and sell in order to make profit of at least$1000 per week, is
A 200
B 250
C 300
D 400
E 500
We see that at $60 selling price and$40 cost price, there is a margin of $20 per unit. If there are x units to be produced, they must bring in the total margin (20x) that can at least cover overhead expense ($3000) and profit (\$1000).

Thus, 20x â‰¥ (3000 + 1000) => 20x â‰¥ 4000 => x â‰¥ 200 units.

Hope this helps!

-Jay
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