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A clothing store's revenue last May was 6 percent less than [#permalink]
15 Dec 2012, 13:46

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Difficulty:

95% (hard)

Question Stats:

45% (02:52) correct
55% (02:03) wrong based on 340 sessions

A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April?

(1) The stores revenue last May was $2,400 less than its revenue last April. (2) The stores expenses last May were 4 percent less than its expenses last April.

Re: A clothing store`s revenue last May was 6 [#permalink]
14 Jan 2013, 19:36

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Expert's post

jgomey wrote:

I did the same, but selecting values for this question made me feel vulnerable to a yes/no outcome, so I was looking for an algebraic explanation. Also, the question indicates that revenue is greater than expense for both months, so I don't think you can end up a with a negative value for May.

These numbers work a bit better for your first example.

Now that I think about it, I may have just answered my own question!

Thought about it a bit more.

Simplifying algebraically:

.94R-.96E = .94R-.94E-.02E = .94(R-E)-.02E Since we are subtracting, we assume E is positive (-E is negative). R-E > .94 (R-E) ALWAYS (given R-E is positive). Thus, R-E > 0.94 (R-E) – 0.02E

Re: A clothing store's revenue last May was 6 percent less than [#permalink]
18 May 2014, 19:35

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mun23 wrote:

A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April?

(1) The stores revenue last May was $2,400 less than its revenue last April. (2) The stores expenses last May were 4 percent less than its expenses last April.

Lemme try and help you on this one.

The easiest way out is to put the alphabetical statements in the form of equations in as minimum variables as possible.

Let us assume the revenue for April = R Revenue for May therefore is = 0.94 R

Let the expense for April = EA Let the expense for May = EM

We are not given any relationship between EA and EM

But we also know that R > EA

Now what we are asked is:

R- EA > 0.94 R - EM

or

0.06 R > EA - EM

1) The stores revenue last May was $2,400 less than its revenue last April. This statement does not tell us any relationship between EA and EM which is required to solve the inequality. Hence, it is not sufficient.

2) The stores expenses last May were 4 percent less than its expenses last April. It says EM = 0.96 EA

Therefore, we get EA - EM = 0.04 EA

Hence, out inequality can be reduced to

0.06 R > 0.04 EA or

R> 2/3 EA

Since we already know R> EA, it has to be greater than 2/3 EA. Hence, this statement is sufficient to answer the question.

Re: A clothing store's revenue last May was 6 percent less than [#permalink]
15 Sep 2014, 04:49

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mun23 wrote:

A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April?

(1) The stores revenue last May was $2,400 less than its revenue last April. (2) The stores expenses last May were 4 percent less than its expenses last April.

Solution : Statement (1) is not sufficient.

Statement (2) is sufficient, refer following figure.

Attachment:

Revenue.jpg [ 65.5 KiB | Viewed 3268 times ]

_________________

Piyush K ----------------------- Our greatest weakness lies in giving up. The most certain way to succeed is to try just one more time. ― Thomas A. Edison Don't forget to press--> Kudos My Articles: 1. WOULD: when to use?| 2. All GMATPrep RCs (New) Tip: Before exam a week earlier don't forget to exhaust all gmatprep problems specially for "sentence correction".

Re: A clothing store's revenue last May was 6 percent less than [#permalink]
12 May 2013, 07:59

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Stmt 1 - Insuff clearly

Stmt 2 - April May Revenue------------ R 0.94R Expense------------ E 0.96E

Given - R>E Question - is Profit in May < Profit in April ( i.e 0.94R-0.96E < R-E ?) Simplifying the above , we get is 4E>6R ? Ans is NO since R>E . Sufficient _________________

Re: A clothing store`s revenue last May was 6 [#permalink]
16 Dec 2012, 06:34

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mun23 wrote:

A clothing store`s revenue last May was 6 percent less than it`s revenue last april.The stores revenue last may was greater than it`s expenses last may, and the stores revenue last april was greater than it`s expenses last april.Was the store`s gross profit last may less than it`s gross profit last april? (A)The store`s revenue last may was $2400 less than it`s revenue last april

(B)The store`s expense last May were 4%less than it`s expense last april

Need details explanation.......... If you find this post helpful plz give +1 kudos

Gross Profit = Revenue - Expense Revenue > Expense as given for both months.

A clothing store's revenue last May was 6 percent less than [#permalink]
02 Dec 2014, 09:09

1

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Let x be the revenue for April. Therefore revenue for May is 0.94x. Let y be the cost for April.

We are asked whether GP for May is less that GP for April?

Gross Profit = Revenue - Cost GP for April = (x-y)

Change in revenue and change in cost will impact GP. In comparison to April, May has seen reduction in both cost and revenue. In order for GP of May to be less than that of April, reduction in revenue has to be greater than reduction in cost. so we can rephrase the question as is reduction in revenue > reduction in cost ?

statement 1 :- The stores revenue last May was $2,400 less than its revenue last April. No information about cost is given. statement in insufficient.

statement 2 :- The stores expenses last May were 4 percent less than its expenses last April. Therefore cost for May is 0.96y. We want to find whether is reduction in revenue > reduction in cost ? is 0.6x(reduction in revenue)>0.4y(reduction in cost) x/y>0.4/0.6 x/y>2/3 ....... ?

In the question it is given that the store's revenue last April was greater than its expenses last April. so x/y has to be greater that 1. Therefore x/y is greater that 2/3 and hence GP for May is less than that for April. Statement is sufficient.

A clothing store's revenue last May was 6 percent less than [#permalink]
05 Aug 2015, 10:33

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Given: a) \(R_m=0.94*R_a\) b) \(R_m>E_m\) c) \(R_a>E_a\) Legend: m = March, a = April

Question: Is \(P_m<P_a\)? OR is \(R_m-E_m<R_a-E_a\)? (Since, Profits = Revenues - Expenses) OR is \(E_a-E_m<0.06*R_a\)? (Re-arranging and using info from a) above)....Lets call this as (d)

Statement 1) \(R_m = R_a- $2400\) Substituting this value in a), we get: \(R_a - $2400 = 0.94 * R_a\) \(0.06*R_a = $2400\) \(R_a = $40,000\)

Substituting this in Question inequality of (d), the question becomes: Is \(E_a-E_m < 0.06*40000\)? Or is \(E_a-E_m<2400\) But we don't know the value of\(E_a\) OR \(E_m\) to say this for sure. INSUFFICIENT.

Statement 2) \(E_m=0.96*E_a\) Then Question inequality of (d) becomes: Is \(0.04*E_a < 0.06 * R_a\)? OR is \(E_a < 1.5*R_a\)?

Now from (c) we know that \(E_a < R_a\) So \(E_a < 1.5*R_a\) definitely. SUFFICIENT.

Answer B _________________

Please consider giving Kudos if you like my explanation

Re: A clothing store's revenue last May was 6 percent less than [#permalink]
10 Jan 2013, 02:20

mun23 wrote:

A clothing store's revenue last May was 6 percent less than its revenue last April. The store's revenue last May was greater than its expenses last May, and the store's revenue last April was greater than its expenses last April. Was the stores gross profit last May less than its gross profit last April?

(1) The stores revenue last May was $2,400 less than its revenue last April. (2) The stores expenses last May were 4 percent less than its expenses last April.

Bunuel can you chime in. I am struggling to understand the OE.

Re: A clothing store`s revenue last May was 6 [#permalink]
10 Jan 2013, 08:46

Expert's post

BangOn wrote:

mun23 wrote:

A clothing store`s revenue last May was 6 percent less than it`s revenue last april.The stores revenue last may was greater than it`s expenses last may, and the stores revenue last april was greater than it`s expenses last april.Was the store`s gross profit last may less than it`s gross profit last april? (A)The store`s revenue last may was $2400 less than it`s revenue last april

(B)The store`s expense last May were 4%less than it`s expense last april

I think this one is pretty difficult. My math isn't that good, so I had to use a plug-n-chug method.

Given the below equations:

Gross Profit = Revenue - Expense Revenue > Expense as given for both months.

Revenue Expense April R E May .94R .96E

Is R - E > .94R - .96E ?

Assume some extreme cases: Case 1: R=1000 | E=999.99 R-E = 0.01 | .94R-.96E = -19.99 | April > May Case 2: R=1000 | E=0 R-E = 1000 | .94R-.96E = 940 | April > May

Re: A clothing store`s revenue last May was 6 [#permalink]
11 Jan 2013, 16:55

asimov wrote:

BangOn wrote:

mun23 wrote:

A clothing store`s revenue last May was 6 percent less than it`s revenue last april.The stores revenue last may was greater than it`s expenses last may, and the stores revenue last april was greater than it`s expenses last april.Was the store`s gross profit last may less than it`s gross profit last april? (A)The store`s revenue last may was $2400 less than it`s revenue last april

(B)The store`s expense last May were 4%less than it`s expense last april

I think this one is pretty difficult. My math isn't that good, so I had to use a plug-n-chug method.

Given the below equations:

Gross Profit = Revenue - Expense Revenue > Expense as given for both months.

Revenue Expense April R E May .94R .96E

Is R - E > .94R - .96E ?

Assume some extreme cases: Case 1: R=1000 | E=999.99 R-E = 0.01 | .94R-.96E = -19.99 | April > May Case 2: R=1000 | E=0 R-E = 1000 | .94R-.96E = 940 | April > May

So no matter what, April always greater than may.

I did the same, but selecting values for this question made me feel vulnerable to a yes/no outcome, so I was looking for an algebraic explanation. Also, the question indicates that revenue is greater than expense for both months, so I don't think you can end up a with a negative value for May.

These numbers work a bit better for your first example.

Re: A clothing store's revenue last May was 6 percent less than [#permalink]
26 Nov 2014, 22:35

gmacforjyoab wrote:

Stmt 1 - Insuff clearly

Stmt 2 - April May Revenue------------ R 0.94R Expense------------ E 0.96E

Given - R>E Question - is Profit in May < Profit in April ( i.e 0.94R-0.96E < R-E ?) Simplifying the above , we get is 4E>6R ? Ans is NO since R>E . Sufficient

Re: A clothing store's revenue last May was 6 percent less than [#permalink]
27 Jun 2015, 04:44

here is another way to look at statement 2. Already explained but will simplify through algebra...

Let ---------------- --Apr---------------May Revenue---------- ----X--------------- 0.94X ( given in stem that revenue is 6% less in May) Expense ---------- ----Y ---------- ----0.96Y ( Given in statement 2 that expense in May is 4% less)

We have to prove is : 0.94X - 0.96 Y > X- Y (Profit of May is greater than Apr)

We are told that in both months Profit is +ve or greater than zero. Means that X>Y --> X/Y > 1.

now reducing the above equation 0.94X - 0.96 Y > X- Y we get X/Y < 2/3

Now for (0.94X - 0.96 Y > X- Y) equation to be true, X/Y < 2/3 has to be true.

But we are told X/Y>1 therefore the above equation doesn't hold true.

Hence B.

gmatclubot

Re: A clothing store's revenue last May was 6 percent less than
[#permalink]
27 Jun 2015, 04:44

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