profit problem

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profiler01: Newbie | Next Rank: 10 Posts; Posts: 1; Joined: Fri Dec 01, 2006 5:01 pm

by profiler01 » Fri Dec 01, 2006 5:21 pm

Hello. I'm totally confused with this problem. Need your help.

A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40 percent of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer’s gross profit from the purchase and the sale of the desk?
* $40
* $60
* $80
* $90
* $100

The answer is $100 (!?) :twisted:

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Source: Beat The GMAT — Problem Solving | Fri Dec 01, 2006 5:21 pm

kulksnikhil: Senior | Next Rank: 100 Posts; Posts: 58; Joined: Tue May 23, 2006 3:35 pm; Location: Seoul, Korea; Thanked: 2 times

Re: profit problem

by kulksnikhil » Sat Dec 02, 2006 4:16 am

profiler01 wrote:Hello. I'm totally confused with this problem. Need your help.

A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40 percent of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer’s gross profit from the purchase and the sale of the desk?
* $40
* $60
* $80
* $90
* $100

The answer is $100 (!?) :twisted:

Put in expression,

Let X be the Markup,

Putting in to expression,

150+X - 150 = (40/100)(150+X)

X = (40/100) (150 + X)

100X = 40*150 +40X
60X = 6000
X=100

So 150+100 -150 =100

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BTGmoderatorRO: Moderator; Posts: 772; Joined: Wed Aug 30, 2017 6:29 pmFollowed by: 6 members

by BTGmoderatorRO » Fri Sep 29, 2017 2:13 pm

The purchase price (pp) = $150
The dealer then set the selling price (sp) as x = pp + 40% of sp ---------------------(1)
let's represent the selling price with 'x', we can rewrite (i) as
x = pp + 40% of sp
since pp = $150
x = 150 + (40/100) * (x)
x - 0.4x = 150
0.6x = 150
x = 150/0.6
x=250

Thus, the selling point is $250.
since we know that;
Gross profit = selling profit - cost price
Gross profit = $ (250-150)
=$100

The dealer's gross profit is $100.

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Brent@GMATPrepNow: GMAT Instructor; Posts: 16207; Joined: Mon Dec 08, 2008 6:26 pmFollowed by: 1268 members; Location: Vancouver, BC; Thanked: 5254 times; GMAT Score:770

by Brent@GMATPrepNow » Fri Sep 29, 2017 4:12 pm

A furniture dealer purchased a desk for $150 and then set the selling price equal to purchasing price plus a markup that was 40% of selling price. If the dealer sold the desk at selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?

A. $40
B. $60
C. $80
D. $90
E. $100

Let S = the selling price

The dealer ... set the selling price equal to purchasing price ($150) plus a markup that was 40% of selling price.
So, the markup = 0.4S
In other words: S = 150 + 0.4S
Subtract 0.4S from both sides to get: 0.6S = 150
Solve: S = 250
In other words, the selling price was $250

What was the dealer's gross profit from the purchase and the sale of the desk?
The profit = $250 - $150 = [spoiler]$100 = E[/spoiler]

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8177; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

Re: profit problem

by Scott@TargetTestPrep » Wed Jan 29, 2020 5:21 am

profiler01 wrote: ↑
Fri Dec 01, 2006 5:21 pm
Hello. I'm totally confused with this problem. Need your help.

A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40 percent of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer’s gross profit from the purchase and the sale of the desk?
* $40
* $60
* $80
* $90
* $100

The answer is $100 (!?) :twisted:

We are given that a furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40 percent of the selling price.
We can create the following equation in which s = the selling price.
150 + 0.4s = s
150 = 0.6s
1,500 = 6s
250 = s
Now we can determine the gross profit, which is revenue – cost.
Gross profit = $250 – $150 = $100

Answer: E

Scott Woodbury-Stewart
Founder and CEO
[email protected]

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