Hi, can someone help me solve this profit question from GMAT Quant section?
On a certain day, a bakery produced a batch of rolls at a total production cost of $300. On that day, of the rolls in the batch were sold, each at a price that was 50 percent greater than the average (arithmetic mean) production cost per roll. The remaining rolls in the batch were sold the next day, each at a price that was 20 percent less than the price of the day before. What was the bakery’s profit on this batch of rolls?
A. $150
B. $144
C. $132
D. $108
E. $90
A. $150
B. $144
C. $132
D. $108
E. $90
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Asked by M Rizwan 9 months ago
Detail-Oriented Financial Analyst
This one looks messy but actually follows a standard GMAT profit structure. Let the number of rolls be n and the cost per roll be p, so total cost is np = 300.
Now, on Day 1, 4/5 of the rolls were sold at 1.5× the production cost (50% higher). So revenue from Day 1 is:
(4/5)n × (1.5p) = (6/5)*np
The remaining 1/5 of the rolls were sold at 20% less than the selling price from Day 1 — that’s 0.8 × (1.5p) = 1.2p.
So Day 2 revenue = (1/5)n × 1.2p = (6/25)*np
Total revenue = (6/5 + 6/25)*np = (36/25)*np
Profit = (36/25)*np − np = (11/25)*np = (11/25) × 300 = $132
Correct answer: C
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