AbeNeedsAnswers wrote: ↑

Mon May 18, 2020 7:27 pm

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.

E

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