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ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell

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ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell

by VJesus12 » Fri May 08, 2020 8:17 am

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ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit?

(A) $20,874.25
(B) $30,943.25
(C) $41,308.50
(D) $51,817.50
(E) $53,624.25

[spoiler]OA=A[/spoiler]

Source: Magoosh
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Re: ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sel

by deloitte247 » Sun May 10, 2020 3:11 am
Manufacturing cost for sets of shoes = $11,450
Cost per set = $19.75
Selling price per set = $52.50

Profit = sales - manufacturing cost
Profit per set = $52.50 - $19.75 = $32.75

Given that ACME produces 987set of horseshoes
Profit = $32.75 * 987
= $32,324.25

Since an initial investment of $11,450 was made, the profit made from the horseshoes is now:
Profit = $32,324.25 - $11,450
=$20,874.25

Answer = A
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Re: ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sel

by swerve » Sun May 10, 2020 6:16 am
VJesus12 wrote: ↑
Fri May 08, 2020 8:17 am
 ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit?

(A) $20,874.25
(B) $30,943.25
(C) $41,308.50
(D) $51,817.50
(E) $53,624.25

[spoiler]OA=A[/spoiler]

Source: Magoosh
Approximations
\(19.75 = 20.00\)
\(52.50 = 50\)
\(987 = 1000\)
Initial cost \(= 20*1000 + 11450 = 31450\)
Selling \(= 50 * 1000 = 50000\)
Profit \(= 50000 - 31450 = 19000\)
Close to \(20\)k.

Therefore, A
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Re: ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sel

by Brent@GMATPrepNow » Sun May 10, 2020 10:00 am
VJesus12 wrote: ↑
Fri May 08, 2020 8:17 am
 ACME’s manufacturing costs for sets of horseshoes include a $11,450 initial outlay, and $19.75 per set. They can sell the sets $52.50. If profit is revenue from sales minus manufacturing costs, and the company produces & sells 987 sets of horseshoes, what was their profit?

(A) $20,874.25
(B) $30,943.25
(C) $41,308.50
(D) $51,817.50
(E) $53,624.25

[spoiler]OA=A[/spoiler]

Source: Magoosh
Here's a slight twist:

It COSTS $19.75 per set, and each set is SOLD for $52.50
So, the company makes approximately $33 per set ($52.50 - $19.75 ≈ $33)

The company sold 987 sets.
So, the profit ≈ ($33)(1000) ≈$33,000

Keep in mind, that there's also the initial outlay of $11,450

So, the TOTAL PROFIT ≈$33,000 - $11,450
≈ $21,500

The best (closest) answer is A

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
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