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A software company contracted its sister network

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A software company contracted its sister network

by BTGmoderatorLU » Fri Aug 03, 2018 2:49 pm

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Source: Princeton Review

A software company contracted its sister network technologies firm to upgrade its network and storage equipment. The sister firm charged the software company only for equipment and labor. What fraction of the total amount paid for the upgrade was the labor charge?

(1) Labor cost was $10,000 less than the total cost of the upgrade.
(2) Without the labor charge, the total cost of the upgrade would have been only 5/6 as much.

The OA is B.
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Source: — Data Sufficiency |
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by GMATGuruNY » Fri Aug 03, 2018 7:33 pm

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BTGmoderatorLU wrote:Source: Princeton Review

A software company contracted its sister network technologies firm to upgrade its network and storage equipment. The sister firm charged the software company only for equipment and labor. What fraction of the total amount paid for the upgrade was the labor charge?

(1) Labor cost was $10,000 less than the total cost of the upgrade.
(2) Without the labor charge, the total cost of the upgrade would have been only 5/6 as much.
Statement 1:
Case 1: T= 20,000 and L = 10,000,
In this case, L/T = 10,000/20,000 = 1/2.
Case 2: T = 30,000 and L = 20,000
In this case, L/T = 20,000/30,000 = 2/3.
Since L/T can be different values, INSUFFICIENT.

Statement 2:
In other words, the equipment charge alone is equal to 5/6 of the total charge.
Case 1: T=6 and E = (5/6)(6) = 5, with the result that L=1
In this case, L/T = 1/6.
Case 2: T=12 and E = (5/6)(12) = 10, with the result that L=2
In this case, L/T = 2/12 = 1/6.
Since L/T is the SAME VALUE in each case, SUFFICIENT.

The correct answer is B.
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