From the sale of sleeping bags, a retailer made a gross profit of 12% of the wholesale cost. If each sleeping bag was...

[BTGmoderatorLU]

Source: GMAT Paper Tests

From the sale of sleeping bags, a retailer made a gross profit of 12% of the wholesale cost. If each sleeping bag was sold for $28, what was the wholesale cost per bag?

A. 3.00
B. 3.36
C. 24.64
D. 25.00
E. 31.36

The OA is D

[Scott@TargetTestPrep]

Source: GMAT Paper Tests

From the sale of sleeping bags, a retailer made a gross profit of 12% of the wholesale cost. If each sleeping bag was sold for $28, what was the wholesale cost per bag?

A. 3.00
B. 3.36
C. 24.64
D. 25.00
E. 31.36

The OA is D

Solution:

Since the retailer made a profit of 12% of the wholesale cost:

profit = 0.12(cost)

revenue - cost = 0.12(cost)

28 - cost = 0.12(cost)

28 = 1.12c

28/1.12 = c

25 = c = wholesale cost

Answer: D