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jcnissi: Junior | Next Rank: 30 Posts; Posts: 18; Joined: Sat Jun 12, 2010 10:17 pm; Thanked: 1 times

by jcnissi » Mon Jun 14, 2010 2:08 pm

A retailer sold an appliance for 30 percent above cost, which represented a gross profit of $21.00. For what price did the retailer sell the appliance?

a. $27.30
b. $51.00
c. $63.00
d. $70.00
e. $91.00

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student22: Master | Next Rank: 500 Posts; Posts: 216; Joined: Mon Dec 21, 2009 10:26 am; Thanked: 16 times

by student22 » Mon Jun 14, 2010 2:21 pm

Profit = revenue - cost

revenue = 1.30C, where C refers to Cost
cost = C

Profit = 1.30C - C --> 21.00 = 1.30C - C --> 21.00 = .30C --> C = 70

That means that revenue = 1.30C or 1.30(70) = 91. E.

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EdWood: Junior | Next Rank: 30 Posts; Posts: 15; Joined: Fri Jun 04, 2010 12:11 am

by EdWood » Mon Jun 14, 2010 2:56 pm

Let Cost Price(CP)=x
Selling Price(SP) = 30% above CP
SP= 30% of x + x = 0.3x +x = 1.3x

Profit = SP - CP = 1.3x - x = 0.3 x
Its given that Profit is $21, so 21 = 0.3 x
x= 70.

SP = 1.3x = 1.3 * 70 = 91
Selling Price = $ 91.

Ans E

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indiantiger: Master | Next Rank: 500 Posts; Posts: 362; Joined: Fri Oct 02, 2009 4:18 amFollowed by: 1 member; Thanked: 26 times

by indiantiger » Mon Jun 14, 2010 4:20 pm

Let the cost price be c
profit = c + 30c/100 -c
30c/100 = 21
c = 70

the price at which appliance was sold = 70 + 70 * 30/100 = 91 (E)

"Single Malt is better than Blended"

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this_time_i_will: Master | Next Rank: 500 Posts; Posts: 268; Joined: Wed Mar 17, 2010 2:32 am; Thanked: 17 times

by this_time_i_will » Mon Jun 14, 2010 5:30 pm

let x is cp.

so 0.3x = 21=>x=70.
sp=x+profit = 70+21=91

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https://www.iwantutopia.blocked/

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Stuart@KaplanGMAT: GMAT Instructor; Posts: 3225; Joined: Tue Jan 08, 2008 2:40 pmFollowed by: 614 members; Location: Toronto; Thanked: 1710 times; GMAT Score:800

by Stuart@KaplanGMAT » Mon Jun 14, 2010 5:50 pm

jcnissi wrote:A retailer sold an appliance for 30 percent above cost, which represented a gross profit of $21.00. For what price did the retailer sell the appliance?

a. $27.30
b. $51.00
c. $63.00
d. $70.00
e. $91.00

Lots of good algebra, but this is a perfect question for backsolving.

Other things being equal, we should start with either B or D. A and B might seem on the small side (using common sense), so let's start with D.

If the sale price is $70.00, then the cost is $70-$21 = $49. Is 21 = 30% of 49? No, it's more than 30%, so D must be wrong.

Since 21 is more than 30% of 49, we need to increase our sales price. E is the only choice bigger than $70, so we can confidently choose E without testing it out.

Stuart Kovinsky | Kaplan GMAT Faculty | Toronto

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