Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized for You

we will pick new questions that match your level based on your Timer History

Track Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

22 Jul 2010, 11:55

2

This post received KUDOS

13

This post was BOOKMARKED

00:00

A

B

C

D

E

Difficulty:

85% (hard)

Question Stats:

54% (02:18) correct
46% (01:25) wrong based on 237 sessions

HideShow timer Statistics

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]

Show Tags

22 Jul 2010, 12:04

7

This post received KUDOS

Expert's post

12

This post was BOOKMARKED

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]

Show Tags

22 Jul 2010, 12:05

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]

Show Tags

22 Jul 2010, 12:05

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]

Show Tags

22 Jul 2010, 12:53

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]

Show Tags

23 Jul 2010, 06:57

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]

Show Tags

13 Oct 2013, 02:45

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]

Show Tags

23 Feb 2014, 23:50

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]

Show Tags

08 Mar 2015, 13:46

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]

Show Tags

04 Jun 2015, 04:39

Expert's post

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]

Show Tags

04 Jun 2015, 04:46

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". _________________

A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

18 Jun 2016, 17:23

Hi all. I’m not very good at mathy explanations (more of a verbal guy), but I got this question right first time in about 2 minutes. Here is my logic to it:

The question stem tells us that the company was paid $500k for the project, and states that only labor and material are the costs. It then asks if the company’s profit is greater than 150k. Another way of thinking of that is asking if the costs were greater than $350k. (Since $500k payment – $350k cost = $150k profit)

Statement 1 tells us that the ratio of total cost to cost of material is 3 to 1. Because the question stem states the only other cost is labor, we know that the ratio of labor cost to material cost is 2:1. For every dollar of material there is 2 dollars of labor. Not sufficient on its own.

Statement 2 tells us the company profit is greater than its cost of labor. An important part of that is that it means profit is indeed a positive number! Not sufficient on its own.

With the statements combined we know that profit is greater than labor, and the ratio of labor to material is 2:1. The limit ends up being $200k profit, $200k labor, and $100k materials. The company’s actual costs have to be lower than this limit. Even the limit only has $300k of cost, which is much lower than $350k as asked in the question stem.

Answer is C.

gmatclubot

A construction company was paid a total of $500,000 for a
[#permalink]
18 Jun 2016, 17:23

Part 2 of the GMAT: How I tackled the GMAT and improved a disappointing score Apologies for the month gap. I went on vacation and had to finish up a...

So the last couple of weeks have seen a flurry of discussion in our MBA class Whatsapp group around Brexit, the referendum and currency exchange. Most of us believed...

This highly influential bestseller was first published over 25 years ago. I had wanted to read this book for a long time and I finally got around to it...