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Last month, all units of product X produced by a certain com

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bounce87 Junior | Next Rank: 30 Posts Default Avatar
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Last month, all units of product X produced by a certain com

Post Fri Sep 22, 2017 8:58 pm
Last month, all units of product X produced by a certain company sold out and the company's total cost were equal to $90000 plus 10 percent of the company's total revenue from all units of product X sold. If the company made a profit on product X last month , was the unit price of product X sold greater than $5 ?

1. The company’s total costs of all units of X product sold were $120,000.

2. The number of all Units of product X sold last month is less than 20000.

I didn't understand how the second statement is sufficient.
Is this correct? pq > 90000 + pq/10. But it is also given that q<20000.
Please explain!

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Top Reply
Post Mon Sep 25, 2017 3:38 pm
Hi bounce87,

What is the source of this question? I ask because the prompt you've posted is almost identical to this Official Guide Question:

http://www.beatthegmat.com/a-certain-company-og13-t116753.html

But it appears that someone has moved the 'pieces' of the prompt around and changed the prompt slightly (although it has the same correct answer).

GMAT assassins aren't born, they're made,
Rich

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Contact Rich at Rich.C@empowergmat.com

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Post Mon Sep 25, 2017 12:45 am
bounce87 wrote:
Last month, all units of product X produced by a certain company sold out and the company's total cost were equal to $90000 plus 10 percent of the company's total revenue from all units of product X sold. If the company made a profit on product X last month , was the unit price of product X sold greater than $5 ?

1. The company’s total costs of all units of X product sold were $120,000.

2. The number of all Units of product X sold last month is less than 20000.

I didn't understand how the second statement is sufficient.
Is this correct? pq > 90000 + pq/10. But it is also given that q<20000.
Please explain!
Say Total cost = C, and total Revenue is R

Thus,

C = 90,000 + 10% of R

C = 90,000 + R/10 ---(1)

Statement 1: The company’s total costs of all units of X product sold were $120,000.

C = 120,000

Thus, from (1), we get

120,000 = 90,000 + R/10

R = $30,000

We do not know the number of units, thus, we cannot ascertain if the unit price of product X sold greater than $5. Insufficient.

Statement 2: The number of all units of product X sold last month is less than 20,000.

We have C = 90,000 + R/10 and we know that the profit was made, thus, R > C

Thus, R > 90,000 + R/10

9R/10 > 90,000

R > 100,000

Say the number of all units of product X sold last month is 20000.

Thus, unit price of product X sold = R/20000 > 100,000/20,000 > 5.

Since 100,000 divided by 20,000 is 5, thus 100,000 divided by a number less than 20,000 must be greater than 5. Sufficient.

The correct answer: B

Hope this helps!

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