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A construction company was paid a total of $500,000 for a [#permalink]
22 Jul 2010, 10:55
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Question Stats:
55% (02:21) correct
45% (01:35) wrong based on 200 sessions
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?
(1) The company's total cost was three times its cost for materials.
(2) The company's profit was greater than its cost for labor
Re: Cost/Profit Problem - is my explanation correct? [#permalink]
22 Jul 2010, 11:04
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Expert's post
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asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?
(1) The company's total cost was three times its cost for materials.
(2) The company's profit was greater than its cost for labor
Given: \(c=l+m\) Question is \(p=500-c>150\) true?
(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.
(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.
(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.
Re: Cost/Profit Problem - is my explanation correct? [#permalink]
22 Jul 2010, 11:05
Cost(C) = Labor(L) + Materials(M) Profit(P) = 500,000-C is 500,000 - C > 150,000? is C < 350,000
(1) C = 3M C = 3M = L + M, L = 2M
(2) P > L Substitute 2M for L P > 2M multiply both sides by 3/2 (3/2)P > 3M Substitute C for 3M (3/2)P > C plug 150,000 in for P (3/2)(150,000) > C 225,000 > C
So, C < 350,000 and the answer is yes, so then (1) and (2) together are sufficient
Re: Cost/Profit Problem - is my explanation correct? [#permalink]
22 Jul 2010, 11:05
Bunuel wrote:
asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?
(1) The company's total cost was three times its cost for materials.
(2) The company's profit was greater than its cost for labor
Given: \(c=l+m\) Question is \(p=500-c>150\) true?
(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.
(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.
(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.
Answer: C.
wow, that was fast, I was just typing my explanation, but yours looks much simpler. thanks
Re: Cost/Profit Problem - is my explanation correct? [#permalink]
22 Jul 2010, 11:53
1
This post received KUDOS
My solution:
1) Total cost = 3M, Labor = 2M, NS
2) Profit >= Labor, NS
1) and 2) Profit >= 2M, therefore profit must be at least 2M/(2M+M+2M)*$500,000 = 2/5*$500,000, therefore profit >= $200,000. Sufficient. _________________
If you find my posts useful, please award me some Kudos!
Re: Cost/Profit Problem - is my explanation correct? [#permalink]
23 Jul 2010, 05:57
Gladly.
Since from:
1) we know that Labor (L) = 2 * Materials (M), and 2) we know that Profit (P) >= L 1) and 2) combined show that P >= 2M
There are only three components of the $500,000: P, L and M, so P+L+M = $500,000. The minimum amount of P is the case that P = L = 2M. In order to find what fraction P is of P+L+M we simply take \(P/(P+M+L) = 2M/(2M+M+2M) = 2M/5M = 2/5\). Now that we know what fraction of the $500,000 is P, we simply multiply 2/5 * $500,000 to get $200,000. Sufficient. _________________
If you find my posts useful, please award me some Kudos!
Combining 1 and 2; T=M+L=L/2+L T=(3/2)L P=500-T=500-(3/2)L P=500-(3/2)L P>L 500-(3/2)L>L 500>(5/2)L (5/2)L<500 L<200 Since M is half L. M should be <100 Even if we consider maximum of these; Total maximum expenditure = 200+100=300<350. Thus profit will always be >150.
Actually, you may not want to use so many variables and then plug values. Chances of error are very high in this case. Preferably, stick to algebra or reason it out as follows:
>>> A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials.
500,000 is divided into 3 parts - Labor costs, material costs and profit.
>>> Was the company's profit greater than $150,000?
Was profit > 150,000?
>>> (1) The company's total cost was three times its cost for materials.
labor cost + material cost = 3 * material cost labor cost = 2* material cost
So now we know that 500,000 is divided into 3 parts - 2*material costs (labor), material costs and profit. But no idea what these costs and profit are. Not sufficient.
>>> (2) The company's profit was greater than its cost for labor Profit > labor cost but no idea how much labor cost or material cost was. Not sufficient.
Together, Profit > 2 material cost so even if it was greater than 2*material cost by a very very small amount, 500,000 would have been split into 3 parts: 2*material cost (labor), material cost and 2*material cost (profit) So 2*material cost would be at least 200,000. Hence profit is at least 200,000. Sufficient. Answer (C). _________________
1. L+M = 3M => L = 2M. No info on M or L values, insuff. 2. L < 150K. M=? insuff
Together, L<150K, which means M<75K, which implies that the labor cost is 3M<3x75K=225K. Obviously, this means that profit > 150K. Suff. _________________
I am the master of my fate. I am the captain of my soul. Please consider giving +1 Kudos if deserved!
DS - If negative answer only, still sufficient. No need to find exact solution. PS - Always look at the answers first CR - Read the question stem first, hunt for conclusion SC - Meaning first, Grammar second RC - Mentally connect paragraphs as you proceed. Short = 2min, Long = 3-4 min
Re: A construction company was paid a total of $500,000 for a [#permalink]
13 Oct 2013, 01:45
Hello from the GMAT Club BumpBot!
Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).
Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________
Re: A construction company was paid a total of $500,000 for a [#permalink]
23 Feb 2014, 22:50
Hi all. Bumping this topic because I didn't find an adequate answer explanation.
Here's mine:
Given :
Profit = 500,000 - TC
TC = L + M
St. 1: (N.S.)
TC = 3M 3M = L + M 2M = L
St. 2: (N.S.)
P > L , since L = 2M , Profit > 2M
Both Statements:
P = 500,000 - 3M [TC = 3M from st. 1] 2M = 500,000 - 3M [P > L , P > 2M ] . Substitute 2M into the profit formula, knowing that the Profit number must be greater than 2M.
solve for M: ... M = $100,000. Plug into profit formula :
Re: A construction company was paid a total of $500,000 for a [#permalink]
08 Mar 2015, 12:46
Hello from the GMAT Club BumpBot!
Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).
Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________
A construction company was paid a total of $500,000 for a [#permalink]
04 Jun 2015, 03:39
Bunuel wrote:
asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?
(1) The company's total cost was three times its cost for materials.
(2) The company's profit was greater than its cost for labor
Given: \(c=l+m\) Question is \(p=500-c>150\) true?
(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.
(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.
(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.
Answer: C.
Hi Bunuel, In Statement 1 we concluded that m< 350/3= 116.66 So we can substitute the result in the equation 500-(3*116)=152>150. We can choose number lower than 116. Choose 115 and apply in the equation 500-(3*115)=155 > 150 any number lower than 350/3 will result in P>150. So Statement A should be Sufficient.
Re: A construction company was paid a total of $500,000 for a [#permalink]
04 Jun 2015, 03:46
Expert's post
Mo2men wrote:
Bunuel wrote:
asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?
(1) The company's total cost was three times its cost for materials.
(2) The company's profit was greater than its cost for labor
Given: \(c=l+m\) Question is \(p=500-c>150\) true?
(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.
(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.
(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.
Answer: C.
Hi Bunuel, In Statement 1 we concluded that m< 350/3= 116.66 So we can substitute the result in the equation 500-(3*116)=152>150. We can choose number lower than 116. Choose 115 and apply in the equation 500-(3*115)=155 > 150 any number lower than 350/3 will result in P>150. So Statement A should be Sufficient.
What is wrong in my work?
From (1) we don't know whether m<117. The question becomes "IS m<117". _________________
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