GMAT Math : Word Problems
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Example Questions
Example Question #4 : Calculating Profit
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?
$3,104
$3,594
$2,544
$2,328
$4,000
$2,544
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:
Example Question #5 : Calculating Profit
Find the number of units, 
Break even profit is 
Example Question #151 : Word Problems
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?
Calculate the net profit by subtracting the cost of the cars from the gross profit:
Example Question #152 : Word Problems
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?
375,000
25,000
600,000
550,000
400,000
400,000
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
Example Question #153 : Word Problems
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 
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
Example Question #151 : Word Problems
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 
The money raised from each cookie sold will be $2.25, so this is to be multilplied by number of cookies 
Example Question #151 : Word Problems
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 
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 
Example Question #154 : Word Problems
The Spanish Club wants to make and sell cookies in order to raise 
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.
Example Question #152 : Word Problems
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?
$360
$800
$260
$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
Example Question #152 : Word Problems
It costs a company an average of 
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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