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GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2506
Given Kudos: 1055
GPA: 3.39
A vendor sells specialty gift baskets at a price of $50.00 per basket,
[#permalink]
21 May 2021, 08:25
21 May 2021, 08:25
Expert Reply
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Question Stats:
60% (01:58) correct
40% (03:09) wrong based on 5 sessions
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A vendor sells specialty gift baskets at a price of $50.00 per basket, which represents a markup of 25% above the cost to produce each basket. The vendor prepared and delivered an order of 120 baskets to a customer. However, that customer returned 15 baskets and requested a partial refund. How much should the vendor refund per basket so that the vender makes a 20% profit on the initial cost of the 120 baskets?
A. $10
B. $16
C. $20
D. $34
E. $40
A. $10
B. $16
C. $20
D. $34
E. $40
Re: A vendor sells specialty gift baskets at a price of $50.00 per basket,
[#permalink]
22 May 2021, 04:30
22 May 2021, 04:30
1
SP of total 120 baskets is 50*120 = 6000
SP is marked 25% above Manufacturing Price(MP)
So MP is 50/1.25 = 40
Cost of making 120 baskets is 120*40 = 4800
Profit on entire transaction after refund is 20% of 4800 = 960
So the SP of baskets after refund should be 4800+960 = 5760
Refund to be given = 6000-5760 = 240
Refund/basket = 240/15 = 16
SP is marked 25% above Manufacturing Price(MP)
So MP is 50/1.25 = 40
Cost of making 120 baskets is 120*40 = 4800
Profit on entire transaction after refund is 20% of 4800 = 960
So the SP of baskets after refund should be 4800+960 = 5760
Refund to be given = 6000-5760 = 240
Refund/basket = 240/15 = 16
gmatclubot
Re: A vendor sells specialty gift baskets at a price of $50.00 per basket, [#permalink]
22 May 2021, 04:30
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