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A certain computer company produces two different monitors, \(P\) and \(Q.\) In \(2010,\) what was the net profit from

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A certain computer company produces two different monitors, \(P\) and \(Q.\) In \(2010,\) what was the net profit from

by Gmat_mission » Thu Nov 19, 2020 11:43 am

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A certain computer company produces two different monitors, \(P\) and \(Q.\) In \(2010,\) what was the net profit from the sale of the two monitors?

(1) Of the company's expenses in \(2010,\) rent and utilities totaled \(\$500,000.\)
(2) In \(2010,\) the company sold \(50,000\) units of monitor \(P\) at \(\$300\) per unit and \(30,000\) units of monitor \(Q\) at \(\$650\) per unit.

Answer: E

Source: Official Guide
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Source: — Data Sufficiency |

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Re: A certain computer company produces two different monitors, \(P\) and \(Q.\) In \(2010,\) what was the net profit fr

by Brent@GMATPrepNow » Thu Nov 26, 2020 1:42 pm

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Gmat_mission wrote: ↑
Thu Nov 19, 2020 11:43 am
 A certain computer company produces two different monitors, \(P\) and \(Q.\) In \(2010,\) what was the net profit from the sale of the two monitors?

(1) Of the company's expenses in \(2010,\) rent and utilities totaled \(\$500,000.\)
(2) In \(2010,\) the company sold \(50,000\) units of monitor \(P\) at \(\$300\) per unit and \(30,000\) units of monitor \(Q\) at \(\$650\) per unit.

Answer: E

Source: Official Guide
Target question: In 2010, what was the net profit from the sale of the two monitors?

Key concept: profit = revenue - expenses

Statement 1: Of the company's expenses in 2010, rent and utilities totaled $500,000.
This just tells us that a PORTION of the company's expenses = $500,000
In addition to not knowing the TOTAL expenses, we also don't know the TOTAL revenue
Statement 1 is NOT SUFFICIENT

Statement 2: In 2010, the company sold 50,000 units of monitor P at $300 per unit and 30,000 units of monitor Q at $650 per unit.
From this information, we COULD determine the company's TOTAL revenue (although we wouldn't waste time doing so on test day)
However, even if we know the company's total revenue, we still have no information about the expenses.
Statement 2 is NOT SUFFICIENT

Statements 1 and 2 combined
To answer the target question, we need the companies TOTAL expenses and its TOTAL revenue.
Statement 1 tells us that a PORTION of the company's expenses is $500,000
Statement 2 tells the company's TOTAL revenue
Since we still don't know the company's TOTAL revenue, we can't answer the target question with certainty
The combined statements are NOT SUFFICIENT

Answer: E

Cheers,
Brent
Brent Hanneson - Creator of GMATPrepNow.com
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