Calculating profit - GMAT Quantitative
Card 1 of 144
Company B produces toy trucks for a shopping mall at a cost of $7.00 each for the first 500 trucks and $5.00 for each additional truck. If 600 trucks were produced by Company B and sold for $15.00 each, what was Company B’s gross profit?
Company B produces toy trucks for a shopping mall at a cost of $7.00 each for the first 500 trucks and $5.00 for each additional truck. If 600 trucks were produced by Company B and sold for $15.00 each, what was Company B’s gross profit?
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First of all, we need to know that
.
There are 600 trucks produced. According to the question, the first 500 trucks cost $7.00 each. Therefore, the total cost of the first 500 trucks is 
.
The other 100 trucks cost $5.00 each for a cost of 
.
Add these together to find the cost of the 600 trucks: 
The total profit is easier to calculate since the selling price doesn't change: 
At this point we have both revenue and total cost, so the answer for gross profit is 
.
First of all, we need to know that
There are 600 trucks produced. According to the question, the first 500 trucks cost $7.00 each. Therefore, the total cost of the first 500 trucks is
The other 100 trucks cost $5.00 each for a cost of
Add these together to find the cost of the 600 trucks:
The total profit is easier to calculate since the selling price doesn't change:
At this point we have both revenue and total cost, so the answer for gross profit is
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Abe is a big gambler. He is equally likely to win, lose, or break even. When he loses, his loss is 
. When he wins, he either makes 
or 
with equal probability. How much money does Abe win or lose on average?
Abe is a big gambler. He is equally likely to win, lose, or break even. When he loses, his loss is
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To find the average, multiply each expected profit or loss by its probability:
To find the average, multiply each expected profit or loss by its probability:
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Mark buys 1,000 shares of stock for the current stock price of $20 per share. If the stock price goes up to $25 per share, by what percentage does Mark increase his money?
Mark buys 1,000 shares of stock for the current stock price of $20 per share. If the stock price goes up to $25 per share, by what percentage does Mark increase his money?
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Mark spends $20 * 1,000 shares = $20,000. When the stock price increases to $25/share, he makes ($25 – $20) * 1,000 shares = $5,000.
$5,000 / $20,000 = 
= 25%
He does NOT increase his money by 125%, which would mean an additional $25,000, not $5,000.
Mark spends $20 * 1,000 shares = $20,000. When the stock price increases to $25/share, he makes ($25 – $20) * 1,000 shares = $5,000.
$5,000 / $20,000 =
He does NOT increase his money by 125%, which would mean an additional $25,000, not $5,000.
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Mary works at a clothing store. She makes $13/hour and works 40 hours a week. Working at the clothing store gives her a 25% discount on anything they sell. If she buys a sweater that retails for $50 and a jacket that retails for $144, what is her net profit for the week?
Mary works at a clothing store. She makes $13/hour and works 40 hours a week. Working at the clothing store gives her a 25% discount on anything they sell. If she buys a sweater that retails for $50 and a jacket that retails for $144, what is her net profit for the week?
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Mary makes $13/hour and works 40 hours. So she makes
.
However, we need to subtract the cost of the items that she bought. If the sweater retails for $50, Mary buys it for 
because of her 25% discount. Similarly, she buys the jacket for 
. So her net profit is
.
Mary makes $13/hour and works 40 hours. So she makes
However, we need to subtract the cost of the items that she bought. If the sweater retails for $50, Mary buys it for
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A non-profit organization is selling shirts to raise money. They purchase 500 shirts at a cost of $5 per shirt. During the course of the month, they are only able to sell 388 shirts. They donate the extra shirts. If the shirts sell for $13 each, how much does the organization earn/lose during this campaign?
A non-profit organization is selling shirts to raise money. They purchase 500 shirts at a cost of $5 per shirt. During the course of the month, they are only able to sell 388 shirts. They donate the extra shirts. If the shirts sell for $13 each, how much does the organization earn/lose during this campaign?
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To calculate profit, we find the total revenue and subtract the total expense.
The total revenue is the amount of money made from selling 388 shirts: 
The total expense is the amount of money spent on buying 500 shirts: 
To calculate profit, we find the total revenue and subtract the total expense.
The total revenue is the amount of money made from selling 388 shirts:
The total expense is the amount of money spent on buying 500 shirts:
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Last year, a car dealer purchased four cars for $5,000 each, and then later in the year he bought eight more cars for $7,000 each. If this year the car dealer sells the 12 cars for a combined total of $126,000, what is his net profit?
Last year, a car dealer purchased four cars for $5,000 each, and then later in the year he bought eight more cars for $7,000 each. If this year the car dealer sells the 12 cars for a combined total of $126,000, what is his net profit?
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Calculate the net profit by subtracting the cost of the cars from the gross profit:
Calculate the net profit by subtracting the cost of the cars from the gross profit:
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The profit equation for a certain manufacturing process is 
, where 
is the number of units.
How much money will the plant make/lose if it sells 
units?
The profit equation for a certain manufacturing process is
How much money will the plant make/lose if it sells
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Find the number of units, 
, that a company must sell to break even if the profit equation is 
.
Find the number of units,
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Break even profit is 
. Plug this value into the equation to solve for the number of units:
Break even profit is
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It costs $15,000 a month to operate Acme Widgets, Inc, plus $0.25 for every widgets produced. Each widget sells for $0.35. If gross profit is measured by the total dollar amount of sales minus operating and production costs, how many widgets would Acme Widgets, Inc. have to sell to make a profit of $25,000?
It costs $15,000 a month to operate Acme Widgets, Inc, plus $0.25 for every widgets produced. Each widget sells for $0.35. If gross profit is measured by the total dollar amount of sales minus operating and production costs, how many widgets would Acme Widgets, Inc. have to sell to make a profit of $25,000?
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We need to turn the word problem into a mathematical equation, and solve.
The basic profit equation is:
Where G = gross profit, R = revenue, F = fixed or operating costs, and V = variable or production costs.
We know that we want our gross profit to be $25,000, so 
.
Now, R is revenue, the money that the company earns by selling its product. The company earns $0.35 for every widget sold, so 
, where w = number of widgets sold.
F is the operating cost, which is $15,000.
V is the cost of producing the widgets, which is $0.25 per widget.
Plugging in our variables, we get:
The company would have to sell 400,000 widgets to make a profit of $25,000
We need to turn the word problem into a mathematical equation, and solve.
The basic profit equation is:
Where G = gross profit, R = revenue, F = fixed or operating costs, and V = variable or production costs.
We know that we want our gross profit to be $25,000, so
Now, R is revenue, the money that the company earns by selling its product. The company earns $0.35 for every widget sold, so
F is the operating cost, which is $15,000.
V is the cost of producing the widgets, which is $0.25 per widget.
Plugging in our variables, we get:
The company would have to sell 400,000 widgets to make a profit of $25,000
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Read the problem below:
The German Club wants to make and sell cookies in order to raise $500 for a field trip. The equipment they want to use costs $400 to rent and to operate, and the ingredients for the cookies cost 45 cents per cookie. The German Club wants to sell the cookies for $2.25 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $500?
If 
is the number of cookies sold, then which of the following equations represents the revenue function?
Read the problem below:
The German Club wants to make and sell cookies in order to raise $500 for a field trip. The equipment they want to use costs $400 to rent and to operate, and the ingredients for the cookies cost 45 cents per cookie. The German Club wants to sell the cookies for $2.25 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $500?
If
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The money raised from each cookie sold will be $2.25, so this is to be multilplied by number of cookies 
to obtain the revenue in terms of 
. Therefore, the revenue function is 
.
The money raised from each cookie sold will be $2.25, so this is to be multilplied by number of cookies
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Read the problem below:
The French Club wants to make and sell cookies in order to raise $500 for a field trip. The equipment they want to use costs $400 to rent and to operate, and the ingredients for the cookies cost 45 cents per cookie. The French Club wants to sell the cookies for $2 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $500?
If 
is the number of cookies sold, then which of the following equations represents the cost function?
Read the problem below:
The French Club wants to make and sell cookies in order to raise $500 for a field trip. The equipment they want to use costs $400 to rent and to operate, and the ingredients for the cookies cost 45 cents per cookie. The French Club wants to sell the cookies for $2 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $500?
If
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Each cookie costs 45 cents, or $0.45, to make, so the price of the ingredients will be $0.45 times the number of cookies, or 
.
The other expense is a flat price of the rental of the equipment, $400.
Add the expressions to get the cost function
Each cookie costs 45 cents, or $0.45, to make, so the price of the ingredients will be $0.45 times the number of cookies, or
The other expense is a flat price of the rental of the equipment, $400.
Add the expressions to get the cost function
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The Spanish Club wants to make and sell cookies in order to raise 
for a field trip. The equipment they want to use costs 
to rent and to operate, and the ingredients for the cookies cost 
cents per cookie. The Spanish Club wants to sell the cookies for 
each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of 
?
The Spanish Club wants to make and sell cookies in order to raise
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Let 
be the number of cookies sold. The Spanish Club will need to spend 75 cents, or $0.75, per cookie for the ingredients, plus $400 flat for the ingredients, so the cost function will be
They will sell the cookies for $2.50 each, thereby earning a revenue of
They want to earn at least $1,000, so the profit 
must be at least this - or
Solve the inequality:
The Spanish Club will need to sell 800 cookies.
Let
They will sell the cookies for $2.50 each, thereby earning a revenue of
They want to earn at least $1,000, so the profit
Solve the inequality:
The Spanish Club will need to sell 800 cookies.
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Read the problem below:
The Russian Club wants to make and sell cookies in order to raise $800 for a field trip. The equipment they want to use costs $350 to rent and to operate, and the ingredients for the cookies cost 35 cents per cookie. The Russian Club wants to sell the cookies for $1.75 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $800?
If 
is the number of cookies sold, then which of the following inequalities can be solved to obtain an answer to this question?
Read the problem below:
The Russian Club wants to make and sell cookies in order to raise $800 for a field trip. The equipment they want to use costs $350 to rent and to operate, and the ingredients for the cookies cost 35 cents per cookie. The Russian Club wants to sell the cookies for $1.75 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $800?
If
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Let 
be the number of cookies sold. The Russian Club will need to spend 35 cents, or $0.35, per cookie for the ingredients, plus $350 flat for the ingredients, so the cost function will be
They will sell the cookies for $1.75 each, thereby earning a revenue of
They want to earn at least $800, so the profit 
must be at least this - or
Replacing 
and 
with their definitions, the inequality becomes
Let
They will sell the cookies for $1.75 each, thereby earning a revenue of
They want to earn at least $800, so the profit
Replacing
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Adam buys 12 broken cell phones for $50 each. If he fixes the cell phones and sells them each for $80, what is his total profit?
Adam buys 12 broken cell phones for $50 each. If he fixes the cell phones and sells them each for $80, what is his total profit?
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Adam first buys 12 cell phones for $50 each, which means he spends:
12($50) = $600
He then sells the phones for $80 each, which means he earns:
12($80) = $960
The profit is the earnings minus the expenses, so Adam's profit is:
$960 - $600 = $360
Adam first buys 12 cell phones for $50 each, which means he spends:
12($50) = $600
He then sells the phones for $80 each, which means he earns:
12($80) = $960
The profit is the earnings minus the expenses, so Adam's profit is:
$960 - $600 = $360
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It costs a company an average of 
to build one of their custom woodchippers. The company makes an average profit of 
of the cost of building a machine. To the nearest dollar, what is the average net profit the company makes per unit sold?
It costs a company an average of
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The company makes an average net profit that is of the cost of building a machine. To calculate the average net profit in this case, simply do the following:
So, to the nearest dollar, the company's net profit is 
.
Note: avoid the trap answer 
. Our unrounded answer is 
, so we need to round down to 
instead of rounding up to 
.
The company makes an average net profit that is
So, to the nearest dollar, the company's net profit is
Note: avoid the trap answer
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We have just lost 
percent, or 
, of our investment, what was the amount invested before the loss?
We have just lost
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To find the amount invested prior to the loss set up a proportion that represents what is given mathematically.
To write 60 percent of something is the same as,
If this is equivalent to $6,000 then the statement to solve would read,
.
From here cross multiply and divide to solve for the amount invested prior to the loss.
To find the amount invested prior to the loss set up a proportion that represents what is given mathematically.
To write 60 percent of something is the same as,
If this is equivalent to $6,000 then the statement to solve would read,
From here cross multiply and divide to solve for the amount invested prior to the loss.
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The stock we just bought soared 
percent, in other words our position increased by 
. How much did we initially invest?
The stock we just bought soared
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A 55% increased of the unkown value 
resulting as a 
increase can be written as follow 
.
So
, which is the initial value.
A 55% increased of the unkown value
So
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Mary, a very respected day trader, has the following postions: She invested 
in stock A, 
in stock B and 
in stock C. What is her total return, in dollars on this portfolio considering the fact that since she invested in these stocks, A went up 
, B went down 
and C increased 
.
Mary, a very respected day trader, has the following postions: She invested
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To solve this problem, we simply have to multiply each position by their respective rate.
Note that we use a negative rate if the value decreased.
The final answer is then given by following equation
and we end up with 
.
To solve this problem, we simply have to multiply each position by their respective rate.
Note that we use a negative rate if the value decreased.
The final answer is then given by following equation
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The stock we just bought soared percent, in other words our position increased by . How much did we initially invest?
The stock we just bought soared
Tap to reveal answer
A 55% increased of the unkown value resulting as a increase can be written as follow .
So
, which is the initial value.
A 55% increased of the unkown value
So
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Read the problem below:
The French Club wants to make and sell cookies in order to raise $500 for a field trip. The equipment they want to use costs $400 to rent and to operate, and the ingredients for the cookies cost 45 cents per cookie. The French Club wants to sell the cookies for $2 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $500?
If is the number of cookies sold, then which of the following equations represents the cost function?
Read the problem below:
The French Club wants to make and sell cookies in order to raise $500 for a field trip. The equipment they want to use costs $400 to rent and to operate, and the ingredients for the cookies cost 45 cents per cookie. The French Club wants to sell the cookies for $2 each. At this price, how many cookies will they need to sell in order to earn back the money they paid for the ingredients and the equipment rental and make a profit of $500?
If
Tap to reveal answer
Each cookie costs 45 cents, or $0.45, to make, so the price of the ingredients will be $0.45 times the number of cookies, or .
The other expense is a flat price of the rental of the equipment, $400.
Add the expressions to get the cost function
Each cookie costs 45 cents, or $0.45, to make, so the price of the ingredients will be $0.45 times the number of cookies, or
The other expense is a flat price of the rental of the equipment, $400.
Add the expressions to get the cost function
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