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PRICING ANALYSIS: A retailer evaluates product profitability. What is the gross margin percentage for Product Line A? (1) Selling price is $85 per unit and cost of goods sold is $51 per unit (2) On $500K in sales, the gross profit was $200K

GMAT · 2022 · Data Insights

Question:
PRICING ANALYSIS: A retailer evaluates product profitability. What is the gross margin percentage for Product Line A? (1) Selling price is $85 per unit and cost of goods sold is $51 per unit (2) On $500K in sales, the gross profit was $200K

Options

(A) Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient

(B) Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient

(D) EACH statement ALONE is sufficient

(E) Statements (1) and (2) TOGETHER are NOT sufficient

Answer: (D) EACH statement ALONE is sufficient

Explanation:
Statement (1): Gross margin = (85-51)/85 = 40%. Sufficient. Statement (2): Gross margin = $200K/$500K = 40%. Sufficient.

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PRICING ANALYSIS: A retailer evaluates product profitability. What is the gross margin percentage for Product Line A? (1) Selling price is $85 per unit and cost of goods sold is $51 per unit (2) On $500K in sales, the gross profit was $200K

Options

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PRICING ANALYSIS: A retailer evaluates product profitability. What is the gross margin percentage for Product Line A? (1) Selling price is $85 per unit and cost of goods sold is $51 per unit (2) On $500K in sales, the gross profit was $200K

Options

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