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A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup

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by BTGmoderatorDC » Thu Aug 11, 2022 2:37 am

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A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?

A. $40
B. $60
C. $80
D. $90
E. $100


OA E

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Re: A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a marku

by Brent@GMATPrepNow » Thu Aug 11, 2022 7:29 am
BTGmoderatorDC wrote: ↑
Thu Aug 11, 2022 2:37 am
 A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?

A. $40
B. $60
C. $80
D. $90
E. $100


OA E

Source: GMAT Prep
Let S = the selling price

The dealer ... set the selling price equal to purchasing price ($150) plus a markup that was 40% of selling price.
So, the markup = 0.4S
In other words: S = 150 + 0.4S
Subtract 0.4S from both sides to get: 0.6S = 150
Solve: S = 250
In other words, the selling price was $250

What was the dealer's gross profit from the purchase and the sale of the desk?
The profit = $250 - $150 = $100

Answer: E

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
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Re: A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a marku

by Scott@TargetTestPrep » Thu Jan 12, 2023 6:14 pm
BTGmoderatorDC wrote: ↑
Thu Aug 11, 2022 2:37 am
 A furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?

A. $40
B. $60
C. $80
D. $90
E. $100


OA E

Source: GMAT Prep
We are given that a furniture dealer purchased a desk for $150 and then set the selling price equal to the purchase price plus a markup that was 40 percent of the selling price.

We can create the following equation in which s = the selling price.

150 + 0.4s = s

150 = 0.6s

1,500 = 6s

250 = s

Now we can determine the gross profit, which is revenue – cost.
Gross profit = $250 – $150 = $100

Answer: E

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