The total cost of producing item X is equal to the sum of item X's fixed cost and variable cost. If the variable cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in January?
(1) The fixed cost of producing item X increased by 13% in January.
(2) Before the changes in January, the fixed cost of producing item X was 5 times the variable cost of producing item X.
Production
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Since it asked for %age change,I think "b" should be sufficient.
T = F+V
stmt2: F = 5V
==> T = 6V original
==> if Variable reduced by 0.95%, thus new variable = 0.95V
T2 = 5V+0.95V
form above we can compute %age change
T = F+V
stmt2: F = 5V
==> T = 6V original
==> if Variable reduced by 0.95%, thus new variable = 0.95V
T2 = 5V+0.95V
form above we can compute %age change
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I thought of that as well, but question stem doesn't mention any thing regarding change in fixed cost, thats why I treated stmt 1 as additional information but not necessary to answer the question asked.
No sure if this assumption holds true .Let's see what OA
No sure if this assumption holds true .Let's see what OA