ARE Practice Mock Exam

practice management
1

For one of the questions on ARE 5.0 Mock Exam

When I do the formula I get a different answer than the explanation

Designer B= $95
Breakeven rate= 2.3
12% Profit

I get the following answer
$95/(100%-12%)= 107.95 / 2.3 = 46.94

The explanation on the Mock Exam
$95/(100%-12%)= $83.60 / 2.3 = 36.34

If I multiply
$95 x (100%-12%)= 83.60 / 2.3 = 36.34

I get the same answer as the Mock Exam

2

Hi @carlos11937 - this is a mistake in our explanation, it should say that first, you must multiply the rate by the compliment of the profit (not divide).
Thanks for bringing this to our attention, we’ve revised the explanation accordingly.

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