A department store receives a shipment of 1,000 shirts, for which it pays $9,000. The store sells the shirts at a price 80 percent above cost for one month, after which it reduces the price of the shirts to 20 percent above cost. The store sells 75 percent of the shirts during the first month and 50 percent of the remaining shirts afterward. How much gross income did sales of the shirts generate?
(A) $10,000
(B) $10,800
(C) $12,150
(D) $13,500
(E) $16,200
OA D
Source: Princeton Review
A department store receives a shipment of 1,000 shirts, for
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Hi All,
We're told that a department store receives a shipment of 1,000 shirts, for which it pays $9,000. The store sells the shirts at a price 80 percent above cost for one month, after which it reduces the price of the shirts to 20 percent above cost. The store sells 75 percent of the shirts during the first month and 50 percent of the REMAINING shirts afterward. We're asked to find the total gross income that the shirts generated. This question includes a lot of details, but it's essentially just about doing the necessary Arithmetic and staying organized.
To start, since we paid $9,000 for 1,000 shirts, the shirts cost $9/each
80% above that cost = (1.8)($9) = $16.20
20% above that cost = (1.2)($9) = $10.80
75% of the shirts = 750 shirts
50% of the REMAINING 250 shirts = 125 shirts
Total revenue = ($16.20)(750) + ($10.80)(125)
The answer choices are sufficiently 'spread out' that we can 'round off' the prices in the above calculation:
Total revenue = ($16)(750) + ($11)(125) =
approx. $12000 + $1375 =
approx. $13,375
There's only one answer that's close...
Final Answer: D
GMAT assassins aren't born, they're made,
Rich
We're told that a department store receives a shipment of 1,000 shirts, for which it pays $9,000. The store sells the shirts at a price 80 percent above cost for one month, after which it reduces the price of the shirts to 20 percent above cost. The store sells 75 percent of the shirts during the first month and 50 percent of the REMAINING shirts afterward. We're asked to find the total gross income that the shirts generated. This question includes a lot of details, but it's essentially just about doing the necessary Arithmetic and staying organized.
To start, since we paid $9,000 for 1,000 shirts, the shirts cost $9/each
80% above that cost = (1.8)($9) = $16.20
20% above that cost = (1.2)($9) = $10.80
75% of the shirts = 750 shirts
50% of the REMAINING 250 shirts = 125 shirts
Total revenue = ($16.20)(750) + ($10.80)(125)
The answer choices are sufficiently 'spread out' that we can 'round off' the prices in the above calculation:
Total revenue = ($16)(750) + ($11)(125) =
approx. $12000 + $1375 =
approx. $13,375
There's only one answer that's close...
Final Answer: D
GMAT assassins aren't born, they're made,
Rich
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Cost of per shirt = 9000/1000 = $9;BTGmoderatorDC wrote:A department store receives a shipment of 1,000 shirts, for which it pays $9,000. The store sells the shirts at a price 80 percent above cost for one month, after which it reduces the price of the shirts to 20 percent above cost. The store sells 75 percent of the shirts during the first month and 50 percent of the remaining shirts afterward. How much gross income did sales of the shirts generate?
(A) $10,000
(B) $10,800
(C) $12,150
(D) $13,500
(E) $16,200
OA D
Source: Princeton Review
Price of a shirt in the first month = 9*(100 + 80)% = 9*1.8;
Price of a shirt in subsequent months = 9*(100 + 20)% = 9*1.2;
Number of shirts sold in the first month = 75% of 1000 = 750;
Number of remaining shirts = 1000 - 750 = 250;
Number of shirts sold in the subsequent months = 50% of 250 = 125
Gross income the sales of the shirts generated = Gross income in the first month + Gross income in the subsequent months
= 750*(9*1.8) + 125*(9*1.2)
= 125*9[6*1.8 + 1.2]
= 125*9[10.8 + 1.2]
= 125*9*12
= $13,500.
The correct answer: D
Hope this helps!
-Jay
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0.75*1000 ------ 75% of 1000
0.25*1000*0.5 ------ half of the remaining 25% of 1000
9 ----- price of each t-shirt
1.8 ----- 80 percent above cost
1.2 ----- 20 percent above cost
gross income = 0.75*1000*9*1.8 + 0.25*1000*0.5*1.2*9 = 12150 + 1350 = 13500
Hence option D is the correct answer.
0.25*1000*0.5 ------ half of the remaining 25% of 1000
9 ----- price of each t-shirt
1.8 ----- 80 percent above cost
1.2 ----- 20 percent above cost
gross income = 0.75*1000*9*1.8 + 0.25*1000*0.5*1.2*9 = 12150 + 1350 = 13500
Hence option D is the correct answer.
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We are given that a department store receives a shipment of 1,000 shirts, for which it pays $9,000. Thus, the cost per shirt is 9 dollars.BTGmoderatorDC wrote:A department store receives a shipment of 1,000 shirts, for which it pays $9,000. The store sells the shirts at a price 80 percent above cost for one month, after which it reduces the price of the shirts to 20 percent above cost. The store sells 75 percent of the shirts during the first month and 50 percent of the remaining shirts afterward. How much gross income did sales of the shirts generate?
(A) $10,000
(B) $10,800
(C) $12,150
(D) $13,500
(E) $16,200
OA D
Source: Princeton Review
Since the store sells the shirts at a price 80 percent above cost for one month, the selling price for that month is 1.8 x 9 = $16.20. Since 75 percent of the shirts, or 0.75 x 1,000 = 750 shirts, are sold during this month, the revenue earned is 750 x 16.2 = $12,150.
After that month, 50% of the remaining shirts, or 0.5 x 250 = 125 shirts, are sold at a cost of 1.2 x 9 = $10.80. The revenue earned from the sale of these shirts is 125 x 10.8 = $1,350.
Thus, the gross income earned was $12,150 + $1,350 = $13,500.
Answer: D
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