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Hi mukherjee.tanuj3,
This DS question is based on a "limit" concept which is not too common on Test Day.
We're told that a company was paid $500,000 for a project and the company had only 2 expenses on the project (Labor and Materials). We're asked if the profit on the project was greater than $150,000. This is a YES/NO question.
First, let's name the variables:
P = profit
L = cost of labor
M = cost of materials
L + M + P = 500,000
Fact 1: Total Cost = 3 times the cost of materials
This translates into...
L + M = 3M
L = 2M
We can TEST VALUES to show that this tells us nothing about the profit.
If M=100, L=200, P=499,700 and the answer to the question is YES
If M=150,000, L=300,000, P=50,000 and the answer to the question is NO
Fact 1 is INSUFFICIENT
Fact 2: Profit > Labor
P > L
This tells us nothing about the value of M. The value of M would affect the value of P.
Fact 2 is INSUFFICIENT
Combined, we know the following:
L + M + P = 500,000
L=2M
P > L
With some algebra, we have...
2M + M + P = 500,000
3M + P = 500,000
We ALSO know that P > L, so P > 2M
3M + (>2M) = 500,000
(>5M) = 500,000
This tells us that M is LESS than 100,000
Since M is LESS than 100,000 and L=2M, then L is LESS than 200,000
Therefore, L + M is LESS than 300,000, P MUST be greater than 200,000
The answer to the question is ALWAYS YES.
Combined, SUFFICIENT
Final Answer: C
GMAT assassins aren't born, they're made,
Rich
This DS question is based on a "limit" concept which is not too common on Test Day.
We're told that a company was paid $500,000 for a project and the company had only 2 expenses on the project (Labor and Materials). We're asked if the profit on the project was greater than $150,000. This is a YES/NO question.
First, let's name the variables:
P = profit
L = cost of labor
M = cost of materials
L + M + P = 500,000
Fact 1: Total Cost = 3 times the cost of materials
This translates into...
L + M = 3M
L = 2M
We can TEST VALUES to show that this tells us nothing about the profit.
If M=100, L=200, P=499,700 and the answer to the question is YES
If M=150,000, L=300,000, P=50,000 and the answer to the question is NO
Fact 1 is INSUFFICIENT
Fact 2: Profit > Labor
P > L
This tells us nothing about the value of M. The value of M would affect the value of P.
Fact 2 is INSUFFICIENT
Combined, we know the following:
L + M + P = 500,000
L=2M
P > L
With some algebra, we have...
2M + M + P = 500,000
3M + P = 500,000
We ALSO know that P > L, so P > 2M
3M + (>2M) = 500,000
(>5M) = 500,000
This tells us that M is LESS than 100,000
Since M is LESS than 100,000 and L=2M, then L is LESS than 200,000
Therefore, L + M is LESS than 300,000, P MUST be greater than 200,000
The answer to the question is ALWAYS YES.
Combined, SUFFICIENT
Final Answer: C
GMAT assassins aren't born, they're made,
Rich
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Let L = Labor, M = Materials.A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit for the project greater than 150,000?
(1) The company's total cost was three times its cost for materials.
(2) The company's profit was greater than its cost for labor.
Total Cost = L+M.
To make the math easier, let the revenue = 500.
Profit = Revenue - Cost = 500 - (L+M).
For the profit to be greater than 150:
500 - (L+M) > 150.
L + M < 350.
Question rephrased: Is L+M < 350?
Statement 1: Total Cost=3M.
L+M = 3M
L=2M.
No way to determine whether L+M<350.
Insufficient.
Statement 2: The profit was greater than its cost for labor.
500 - (L+M) > L
500 - L - M > L
2L+M < 500.
No way to determine whether L+M<350.
Statements 1 and 2 combined: L=2M and 2L+M<500.
Substituting L=2M into 2L+M<500, we get:
2(2M) + M < 500.
5M < 500.
M < 100.
Since M<100, and Total Cost=3M, we know that Total Cost < 300.
Sufficient.
The correct answer is C.
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Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.
As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.
For more information, please email me (Mitch Hunt) at [email protected].
Student Review #1
Student Review #2
Student Review #3