Profit Margin

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ACT Math › Profit Margin

Questions 1 - 10

A bakery sells cupcakes for $\$12.00$ per dozen. If it costs $\$4.50$ to make each dozen, how much profit would the bakery earn from selling dozen cupcakes?

$\$75.00$

$\$120.00$

$\$125.00$

$\$96.00$

$\$105.00$

Explanation

The profit that is made is the difference between the amount earned and the amount spent. In this instance, it costs $\$4.50$ to make a dozen cupcakes, but the bakery charges $\$12.00$ per dozen.

To find the profit for one dozen cupcakes:

$$12-$4.50 = \$7.50$

To find the profit for ten dozen cupcakes:

$\$7.50\cdot 10 = \$75.00$

It costs a retail store $\$3.25$ to purchase a bow tie. If this store sells the bow tie for $\$15.50$ , what is its profit percentage? Round to the nearest hundredth.

Explanation

The profit percentage is really just a matter of percent change. We are changing from to . This is easily computed as:

$\frac{15.5-3.25}{3.25}=3.76923076923077...$

This is the same as !

A bakery sells cupcakes for $\$12.00$ per dozen. If it costs $\$4.50$ to make each dozen, how much profit would the bakery earn from selling dozen cupcakes?

$\$75.00$

$\$120.00$

$\$125.00$

$\$96.00$

$\$105.00$

Explanation

The profit that is made is the difference between the amount earned and the amount spent. In this instance, it costs $\$4.50$ to make a dozen cupcakes, but the bakery charges $\$12.00$ per dozen.

To find the profit for one dozen cupcakes:

$$12-$4.50 = \$7.50$

To find the profit for ten dozen cupcakes:

$\$7.50\cdot 10 = \$75.00$

Manufacturing a particular product produces a profit of $\$ 3.05$ for each unit produced. If the cost to produce a unit is $\$ 2.55$ , what is the profit percentage on each unit? Do not round until the final answer.

Explanation

Calculating a percentage profit is the same as calculating a percent change. To find percent change, subtract the "old" amount from the "new" amount, then divide the result by the "old" amount. The result is a percent increase if positive and a percent decrease if negative.

$T_{change} = 100 \cdot \frac{T_2-T_1}{T_1} = 100 \cdot \frac{3.05-2.55}{2.55} = 19.607 % \approx 19.6 %$

Explanation

$T_{change} = 100 \cdot \frac{T_2-T_1}{T_1} = 100 \cdot \frac{3.05-2.55}{2.55} = 19.607 % \approx 19.6 %$

It costs a retail store $\$3.25$ to purchase a bow tie. If this store sells the bow tie for $\$15.50$ , what is its profit percentage? Round to the nearest hundredth.

Explanation

The profit percentage is really just a matter of percent change. We are changing from to . This is easily computed as:

$\frac{15.5-3.25}{3.25}=3.76923076923077...$

This is the same as !

A set of cards were purchased for $\$45$ . If the store earned profit on the sale, what was the original price of the cards? Round to the nearest hundredth.

$\$33.33$

$\$15.75$

$\$38.67$

$\$19.24$

$\$31.44$

Explanation

This question is really asking a hidden percentage change question. It really means, "The price changed from to , signalling a change." Thus, you can set up an equation like this:

$\frac{45-x}{x}=0.35$

Solving for , you get:

In business, profit is defined as revenue minus expenses. A profit is often expressed as a percentage of total revenue.

A company posts a profit for the first quarter of the new year, pleasing investors. If the total profits for the quarter were $\$ 33,500,000$ what were the expenses for the company in that quarter? Round to the nearest dollar.

$\$ 86,142,857$

$\$ 93,258,767$

$\$ 118,257,696$

$\$ 77,841,201$

$\$ 23, 584, 633$

Explanation

If a profit of represents $\$ 33,500,000$ , then we can calculate revenue as:

$x = \frac{33,500,000}{0.28} \approx 119,642,857$

Now, subtract the profit from the total revenue to calculate expenses:

$e \approx 119,642,857 - 33,500,000 \approx 86,142,857$

Thus, the quarterly expenses were $\$ 86,142,857$ .

A set of cards were purchased for $\$45$ . If the store earned profit on the sale, what was the original price of the cards? Round to the nearest hundredth.

$\$33.33$

$\$15.75$

$\$38.67$

$\$19.24$

$\$31.44$

Explanation

This question is really asking a hidden percentage change question. It really means, "The price changed from to , signalling a change." Thus, you can set up an equation like this:

$\frac{45-x}{x}=0.35$

Solving for , you get:

In business, profit is defined as revenue minus expenses. A profit is often expressed as a percentage of total revenue.

$\$ 86,142,857$

$\$ 93,258,767$

$\$ 118,257,696$

$\$ 77,841,201$

$\$ 23, 584, 633$