Q. A local farmer grows wheat on land he rents for a fixed cost of 200000$ per year. The variable cost of growing one bushel of wheat is 10$. In a certain year, the farmer grows and sells 50000 bushels of wheat and makes a profit of 150000$, after paying fixed cost to rent. If every bushel sold for the same price, what was the selling price in dollars of a bushel of wheat?
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Can someone please explain this question to me ? The [spoiler]OA = E[/spoiler]
This is what I am trying to do -
SP = CP + P = ( 200K + 500 K) + ( 150 K + 200 K)
So, basically my question is that do we add 200 K in the Profit or not ? After knowing the answer, I know we don't , but I don't understand why.
My understanding was that as the person is making a profit of 150000$ after paying fixed cost to rent which is 200K, so the total profit he earned should be ( 200 K + 150 K ). Please explain this to me. Thank You.
P.S. Source of this question is from Kaplan GMAT Premier
3
7
11
13
17
Can someone please explain this question to me ? The [spoiler]OA = E[/spoiler]
This is what I am trying to do -
SP = CP + P = ( 200K + 500 K) + ( 150 K + 200 K)
So, basically my question is that do we add 200 K in the Profit or not ? After knowing the answer, I know we don't , but I don't understand why.
My understanding was that as the person is making a profit of 150000$ after paying fixed cost to rent which is 200K, so the total profit he earned should be ( 200 K + 150 K ). Please explain this to me. Thank You.
P.S. Source of this question is from Kaplan GMAT Premier
