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Source: Official Guide for the GMAT 13th Ed. Problem Solving; #88 Official Guide for the GMAT 2015 14th Ed. Problem Solving; #88

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1

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 it produced and sold, then Company X's gross profit per tool is?

2 Explanations

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1

Great!

gross profit = revenue - cost

GP = 8*20000 - (10000 + 3*20000) = 160000 - 70000 = 90000

GP per tool = GP / #tools = 90000 / 20000 = 4.5

Jan 26, 2015 • Comment

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3

Mike McGarry, Magoosh Tutor

Dec 28, 2013 • Comment

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