GMAT Quantitative Reasoning Practice Test 5

Question : 39 of 100

Marks: +1, -0

When Company R reduced its production cost of an electrical tool and kept the selling price of the tool the same, its gross profit on the tool increased from 20 percent of the selling price to 30 percent of the selling price. If the production cost ofthe tool before the reduction was

\$ 120

, what was the production cost of the tool after the reduction?

$\$ 84$
$\$ 96$
$\$100$
$\$ 105$
$\$ 108$

Validate

Solution:

Find the selling price before reduction:

120=80 \% ⇒ 120 \/ 0.8=150

Take

30 \%

off the selling price:

150-(150 × 0.3)=150-45=105

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