A certain product costs a company $65 to make. The product is sold by a salesperson who earns a commission that is equal to 20% of the sales price of the product. The profit the company makes for each unit is equal to the sales price minus the combined cost of making the product and the commission. If the sales price of the product is $100, which of the following equations gives the number of units, u, of the product the company sold to make a profit of $6,840 ?
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A
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B
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C
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D
Correct answer: A
Explanation
Choice A is correct. The sales price of one unit of the product is given as $100. Because the salesperson is awarded a commission equal to 20% of the sales price, the expression 100(1 – 0.2) gives the sales price of one unit after the commission is deducted. It is also given that the profit is equal to the sales price minus the combined cost of making the product, or $65, and the commission: 100(1 – 0.2) – 65. Multiplying this expression by u gives the profit of u units: (100(1 – 0.2) – 65)u. Finally, it is given that the profit for u units is $6,840; therefore (100(1 – 0.2) – 65)u = $6,840.
Choice B is incorrect. In this equation, cost is subtracted before commission and the equation gives the commission, not what the company retains after commission. Choice C is incorrect because the number of units is multiplied only by the cost but not by the sale price. Choice D is incorrect because the value 0.2 shows the commission, not what the company retains after commission.
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