gross profit

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shibal: Master | Next Rank: 500 Posts; Posts: 345; Joined: Wed Mar 18, 2009 6:53 pm; Location: Sao Paulo-Brazil; Thanked: 12 times; GMAT Score:660

by shibal » Fri May 01, 2009 11:20 am

a merchant made a gross profit of 40 dolars from the sale of a tie. if the gross profit was 25% of the cost of the tie to the marchant, for how many dollars more should the merchant have sold the tie for the gross profit to have been 30% of the cost/

OA: 8

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Source: Beat The GMAT — Problem Solving | Fri May 01, 2009 11:20 am

maihuna: Legendary Member; Posts: 1578; Joined: Sun Dec 28, 2008 1:49 amFollowed by: 9 members; Thanked: 82 times; GMAT Score:720

by maihuna » Fri May 01, 2009 11:26 am

CP of tie = 40/1.25 = 4000/125 = 32
30% gain = 5% additional to 32 = 1.60
so 41.60 for 30% or additional 1.60

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mkbigmoz: Senior | Next Rank: 100 Posts; Posts: 49; Joined: Sun Feb 08, 2009 4:53 pmFollowed by: 1 member; Thanked: 3 times

by mkbigmoz » Fri May 01, 2009 11:39 am

G = 40.

G = 1/4 Cost

1/4C = 40

Cost = 160

Sold at 160+40= 200 (retail price)

160+ .3(160)= 208

208-200 = 8

8

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mkbigmoz: Senior | Next Rank: 100 Posts; Posts: 49; Joined: Sun Feb 08, 2009 4:53 pmFollowed by: 1 member; Thanked: 3 times

by mkbigmoz » Fri May 01, 2009 11:40 am

maihuna wrote:CP of tie = 40/1.25 = 4000/125 = 32
30% gain = 5% additional to 32 = 1.60
so 41.60 for 30% or additional 1.60

Maihuna, CP should be 40/.25. Thats why the numbers got all messed up.

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