GMAT Practice Question: A souvenir vendor purchased 1,000 shirts for a special event at a price of 5USD each. The vendor...
Question
A souvenir vendor purchased 1,000 shirts for a special event at a price of 5USD each. The vendor sold 600 of the shirts on the day of the event for 12USD each and 300 of the shirts in the week following the event for 4USD each. The vendor was unable to sell the remaining shirts. What was the vendor's gross profit on the sale of these shirts?
- 1,000USD
- 2,200USD
- 2,700USD
- 3,000USD
- 3,400USD
Topics: word problems, profit/loss, translations
Solution
Step 1
We calculate the total cost by translating the purchase statement using the cost formula.
\text{Cost} = 5 \times 1000 = 5000
Step 2
We calculate the revenue from shirts sold on the day of the event by translating that sales statement.
\text{Revenue}_1 = 12 \times 600 = 7200
Step 3
We calculate the revenue from shirts sold in the week following the event by translating that sales statement.
\text{Revenue}_2 = 4 \times 300 = 1200
Step 4
We add the two revenue streams to find total revenue.
\text{Total Revenue} = 7200 + 1200 = 8400
Step 5
We calculate gross profit by applying the profit formula.
\text{Profit} = 8400 - 5000 = 3400
Answer
3,400USD
