Source: Official Guide for the GMAT 12th Ed. Section 5.3 Problem Solving; #83

2

The total cost for Company X to

The total cost for Company X to produce a batch of tools is $10,000 plus $3 per tool. Each tool sells for $8. The gross profit earned from producing and selling these tools is the total income from sales minus the total production cost. If a batch of 20,000 tools is produced and sold, then Company X’s gross profit per tool is $3.00, $3.75, $4.50, $5.00, $5.50

2 Explanations

1

MICHAEL CHU

$10,000/20,000 = $0.50

$8.00-$3.00-$0.50 = $4.50

Jul 11, 2014 • Comment

2

Gravatar Mike McGarry, Magoosh Tutor

Nov 5, 2012 • Comment

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Section 5.3 Problem Solving

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