A pottery studio sells vases for $30$ dollars each... | Free GMAT Practice Question | GMAT Panda

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Question

A pottery studio sells vases for 30 dollars each. It costs the studio 24 dollars per vase to produce 500 vases and 22 dollars per vase to produce 1000 vases. How much greater will the studio's gross profit be from the production and sale of 1000 vases than from the production and sale of 500 vases?

Answer Choices

A. $2500 dollars$
B. $3000 dollars$
C. $4000 dollars$
D. $5000 dollars$
E. $6000 dollars$

Steps

Explanation	Calculations	Help
$We first name variables for revenue, cost, and profit for 500 and 1000 vases$	$R_{500}, C_{500}, P_{500}, R_{1000}, C_{1000}, P_{1000}$	Theory & Tactics Method Card TRANS1-A Click to view full details
$We then translate "A pottery studio sells vases for 30 dollars each" and "production and sale of 500 vases" using the revenue formula$	$R_{500} = 30 \times 500 = 15000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We translate "it costs the studio 24 dollars per vase to produce 500 vases" using the cost formula$	$C_{500} = 24 \times 500 = 12000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We next use the profit formula to find profit for 500 vases$	$P_{500} = R_{500} - C_{500} = 15000 - 12000 = 3000$	Theory & Tactics Method Card TRANS3-A Click to view full details
$We translate "A pottery studio sells vases for 30 dollars each" and "production and sale of 1000 vases" using the revenue formula$	$R_{1000} = 30 \times 1000 = 30000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We translate "it costs the studio 22 dollars per vase to produce 1000 vases" using the cost formula$	$C_{1000} = 22 \times 1000 = 22000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We then use the profit formula to find profit for 1000 vases$	$P_{1000} = R_{1000} - C_{1000} = 30000 - 22000 = 8000$	Theory & Tactics Method Card TRANS3-A Click to view full details
$Finally, we translate "How much greater will the studio's gross profit be from the production and sale of 1000 vases than from the production and sale of 500 vases?" using subtraction$	$P_{1000} - P_{500} = 8000 - 3000 = 5000$	Theory & Tactics Method Card TRANS1-D Click to view full details

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Final Answer

D

Question

A pottery studio sells vases for 30 dollars each. It costs the studio 24 dollars per vase to produce 500 vases and 22 dollars per vase to produce 1000 vases. How much greater will the studio's gross profit be from the production and sale of 1000 vases than from the production and sale of 500 vases?

Answer Choices

A. $2500 dollars$
B. $3000 dollars$
C. $4000 dollars$
D. $5000 dollars$
E. $6000 dollars$

Steps

Explanation	Calculations	Help
$We first name variables for revenue, cost, and profit for 500 and 1000 vases$	$R_{500}, C_{500}, P_{500}, R_{1000}, C_{1000}, P_{1000}$	Theory & Tactics Method Card TRANS1-A Click to view full details
$We then translate "A pottery studio sells vases for 30 dollars each" and "production and sale of 500 vases" using the revenue formula$	$R_{500} = 30 \times 500 = 15000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We translate "it costs the studio 24 dollars per vase to produce 500 vases" using the cost formula$	$C_{500} = 24 \times 500 = 12000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We next use the profit formula to find profit for 500 vases$	$P_{500} = R_{500} - C_{500} = 15000 - 12000 = 3000$	Theory & Tactics Method Card TRANS3-A Click to view full details
$We translate "A pottery studio sells vases for 30 dollars each" and "production and sale of 1000 vases" using the revenue formula$	$R_{1000} = 30 \times 1000 = 30000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We translate "it costs the studio 22 dollars per vase to produce 1000 vases" using the cost formula$	$C_{1000} = 22 \times 1000 = 22000$	Theory & Tactics Method Card TRANS3-B Click to view full details
$We then use the profit formula to find profit for 1000 vases$	$P_{1000} = R_{1000} - C_{1000} = 30000 - 22000 = 8000$	Theory & Tactics Method Card TRANS3-A Click to view full details
$Finally, we translate "How much greater will the studio's gross profit be from the production and sale of 1000 vases than from the production and sale of 500 vases?" using subtraction$	$P_{1000} - P_{500} = 8000 - 3000 = 5000$	Theory & Tactics Method Card TRANS1-D Click to view full details

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Final Answer

D