MGMAT CR

[PAB2706]

In 2003, the Making Hits Record Company spent 40% of its total budget on the production of ten albums, 30% of its budget on the marketing of these albums, and the remainder of its budget on overhead costs. In the same year, the Song Factory Record Company spent 20% of its total budget on the production of 10 albums and 60% of its budget on the marketing of these albums. Making Hits sold a total of 800,000 copies of the ten records it produced in 2003, while the Song Factory sold a total of 1,600,000 copies of the ten records it produced in 2003.


Assuming each company met its budget, which of the following conclusions is best supported by the information given above?

The amount of money spent on marketing is directly related to the number of copies sold.

Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.

Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.

In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.

The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory spent a higher percentage of its budget on the marketing of its albums.

[rohangupta83]

(D)

[stubbornp]

imo D

[stop@800]

D for me too
all others can not be certainly concluded

[SYim]

IMO A?

[gmat009]

IMO D

[niraj_a]

how is it D? we got no way to know if they had any overhead costs at all?!

using POE, i choose A.

[rohangupta83]

I don't see the argument talking about the amount of money. It can't be A.

Scenario why A is incorrect:

Making hits for all we know had a budget of $100 and spent $30 on marketing, whereas Song factory had a budget of only $10 and spent $6 on marketing. But the sales of song factory are greater than those of Making Hits. Which proves that choice A is incorrect.

[Arunlal]

i have different answer not sure if thats right. i feel E is correct.

Reasons for other being wrong
1) A- we would be concluding too much if we releate the proportion on each as we dont have any supporting premises.
2) B- Out of scope- Money spent is never in frame
3) C- Out of scope- Again revenue is not in scope
4) D- Too much to infer as no information on Overhead cost is provided for factory record company.

5) E- Right because, statistic tell that FRC sold more copies than MH. Also, FRC spent more portions of its budget in marketing.

So E is properly supported by the premises.
Whats the Official Answer??

Correct me where ever i am wrong.

-Arun

[stubbornp]

how is it D? we got no way to know if they had any overhead costs at all?!

using POE, i choose A.

Its Numbers and percentages Question,

For Making hits-Prod of 10 albums=40%

Marketing-30%

overheasd costs-100-(40+30)=30%

Similarly For song factory

Prod of 10 albums=20%

Marketing-60%

For overheasd costs-100-(20+60)=20%


If u ll check overhead costs percentage of song factory is less than that of Making hits...So it should be D.....Hope it clears now..

[Bidisha800]

Only (D), the correct answer, can be concluded.

[Arunlal]

It can be a case where the remaining 20% of hte budget was never used at all by the other compnay.....

PAB2706- OA please

[preetha_85]

It can be a case where the remaining 20% of hte budget was never used at all by the other compnay.....

PAB2706- OA please

that would still mean they spent less on overheads than making hits right...

[khanshainur]

I will Go with option A in this case.