manik11 wrote:At the beginning of last year, Tony's Auto Dealership had 200 cars available for sale on the lot. The cars were acquired by Tony's at an average cost of $10,000 each. During last year, Tony's acquired an additional 50 cars. What was the total acquisition cost of the cars that were on the lot at Tony's at the end of last year?
A) The average cost per car of all cars acquired by Tony's last year was $12,500.
B) Tony's total revenue from cars sold last year was $1,050,000.
OA : E
Source : Veritas Prep
This one is almost a Reading Comprehension question. At the beginning of the year, there are 200 cars on the lot. Total acquisition cost of those cars is 200*10000. During the year, they acquire an additional 50 cars, whose acquisition cost we don't know. We want the total acquisition cost of the cars
on the lot at the end of the year.
S1) This allows us to find the total acquisition cost for all the cars that have been on the lot through the course of the year. It's 200*10000 + 50*12500. But we want the total cost of the cars still on the lost at
the end of the year. How many of those 250 cars have been sold? We have no idea. Not sufficient.
S2) The total revenue gives us nothing about the cost of the additional 50 cars on the lot and tells us nothing about how many cars are left on the lot at the end of the year. Not sufficient.
Together: we still don't know how many cars were sold during the year. Of the 250 cars, are there 150 remaining? 125? 120? We don't know. So still not sufficient. Answer is
E
