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 Post subject: Prep Test Question #11Posted: Sat Jul 23, 2011 6:40 pm

Joined: Thu Feb 10, 2011 11:12 pm
Posts: 10

Above is a GMAT Prep Test Question, which I thought I understood and solved correctly, but apparently not. My answer was C) \$140, the correct answer is D) \$160.

My reasoning was...

Costs = 600 units x \$90 cost ea = \$36,000 cost
Profits = Revenue - Costs, thus Revenue = Profits (\$42k min goal) + Costs (\$36k)
Revenue = \$78k min

\$78k / 600 units = \$130 min sell price, to have \$42k profits.
Closest answer choice C) \$140

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 Post subject: Re: Prep Test Question #11Posted: Mon Jul 25, 2011 9:32 pm

Joined: Mon Jul 25, 2011 9:07 pm
Posts: 3
correction: 600 * 90 = \$54,000

(54000 + 42000)/600 = \$160

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