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A supermarket sells both a leading brand of laundry powder a [#permalink]
28 May 2007, 05:27

00:00

A

B

C

D

E

Difficulty:

85% (hard)

Question Stats:

50% (02:20) correct
50% (01:32) wrong based on 100 sessions

A supermarket sells both a leading brand of laundry powder and its own brand of laundry powder. On all sizes of the leading brand it makes a profit of 15 percent of cost per box. On all sizes of its own brand it makes a profit of 10 percent of cost per box. For a certain month, from the sales of which of the two brands does the supermarket realize the greater profit?

(1) Ounce for ounce, the supermarket pays a higher wholesale price for the leading brand than it does for its own brand. (2) Ounce for ounce, the supermarket sells 25 percent more of its own brand than of the leading brand.

A supermarket sells both a leading brand of laundry powder and its own brand of laudry powder. On all sizes of the leading brand it makes a profit of 15 percent of cost per box. On all sizes of its own brand it makes a profit of 10 percent of cost per box. For a certain month, from the sales of which of the two brands does the supermarket realize the greater profit?

(1) Ounce for ounce, the supermarket pays a higher wholesale price for the leading brand than it does for its own brand.
(2) Ounce for ounce, the supermarket sells 25 percent more of its own brand than of the leading brand.

Stmnt: 1 is obviously insufficient.

So what if it costs more. It could cost only a penny more and the store could sell a Billion boxes of the the leading brand while only selling 1 box of its own brand. who knows?

Stmnt: 2 Sufficient

Take a closer look. NOWHERE in the statment does it say the two powders sell for more than the other. Lets say the store sells 100 boxes of the leading brand. According to the statement the store MUST have sold 125 boxes of its own brand.

Thus it made 15% on 100 boxes for the leading brand.

And it made 12.5% on 125 boxes for the store brand.

So it realizes a greater profit from the leading brand.

You can try this with several numbers and it works out.

I missed the part where we can actually equate 15% profit on an ounce to mean 15% profit on a box. If he is selling more ounces then he is making the profit regardless of box size.

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
12 Oct 2013, 12:32

andrehaui wrote:

A supermarket sells both a leading brand of laundry powder and its own brand of laundry powder. On all sizes of the leading brand it makes a profit of 15 percent of cost per box. On all sizes of its own brand it makes a profit of 10 percent of cost per box. For a certain month, from the sales of which of the two brands does the supermarket realize the greater profit?

(1) Ounce for ounce, the supermarket pays a higher wholesale price for the leading brand than it does for its own brand. (2) Ounce for ounce, the supermarket sells 25 percent more of its own brand than of the leading brand.

For me the answer was (B), please allow me to explain my logic

We need to find which of the 2 brands realizes the greatest profit. We have the profit margins for each. We only need to know the ratio of sales from both.

Statement 1 tells us absolutely nothing. Garbage. Statement 2 tells us exactly that. The ratio of sales between both

Hence answer is (B)

I'm happy to discuss further if anyone has a different opinion. Cheers

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
15 Nov 2013, 15:59

jlgdr wrote:

andrehaui wrote:

A supermarket sells both a leading brand of laundry powder and its own brand of laundry powder. On all sizes of the leading brand it makes a profit of 15 percent of cost per box. On all sizes of its own brand it makes a profit of 10 percent of cost per box. For a certain month, from the sales of which of the two brands does the supermarket realize the greater profit?

(1) Ounce for ounce, the supermarket pays a higher wholesale price for the leading brand than it does for its own brand. (2) Ounce for ounce, the supermarket sells 25 percent more of its own brand than of the leading brand.

For me the answer was (B), please allow me to explain my logic

We need to find which of the 2 brands realizes the greatest profit. We have the profit margins for each. We only need to know the ratio of sales from both.

Statement 1 tells us absolutely nothing. Garbage. Statement 2 tells us exactly that. The ratio of sales between both

Hence answer is (B)

I'm happy to discuss further if anyone has a different opinion. Cheers

J Kudos if it helps!

Can any expert confirm if the answer is indeed B or E I also deduced B

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
15 Nov 2013, 21:55

There are too many assumptions needed to say that B is right. Margins are relative. Sales price, costs and units sold sold is concrete. Are we assuming the leading brand is more expensive than the store brand or vice versa? Are we assuming the products are similarly priced. What if the store brand is a $1 a box and the leading brand is $10 a box. The absolute margins difference would be vastly different if they leading brand is $1.50 a box. Maybe the leading brand invests more in R&D, marketing and branding which is why the cost is so high.

I was fooled into thinking it was B but after some reflection I can see why the answer is E. This is another question you have to be careful on the wording. You are given information in percentage terms and then asked a question in absolute terms. _________________

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
16 Nov 2013, 09:26

The only reason this is E and not C, is because the gross profit in the stem is provided per box, while both statements talk about ounce for ounce metrics. Since we do not know the weight of each box, it is not possible to calculate the profit from the sales of each product.

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
03 Dec 2013, 08:50

andrehaui wrote:

A supermarket sells both a leading brand of laundry powder and its own brand of laundry powder. On all sizes of the leading brand it makes a profit of 15 percent of cost per box. On all sizes of its own brand it makes a profit of 10 percent of cost per box. For a certain month, from the sales of which of the two brands does the supermarket realize the greater profit?

(1) Ounce for ounce, the supermarket pays a higher wholesale price for the leading brand than it does for its own brand. (2) Ounce for ounce, the supermarket sells 25 percent more of its own brand than of the leading brand.

So what's up with this question? Last time I did it though it was B. Now, I'm leaning towards E

Obviously statement 1 is garbage. Why do we care about the price when we have profits? We only need to figure out the weights.

Now for Statement 2

We have own brand 10% profit margin, leading brand 15% profit margin

Now own brand has 25% more of its own brand.

Now it isn't too clear to me when they say it sells both does it mean it only sells those two? Lets assume for a moment that they are both the only brands that it sells. Then we would have 75% and 25% in which case the answer would be C because it would be sufficient to know the weights.

If they are not the only brands then the answer would be E cause we could have both scenarios considering only that the weights have a difference of 25%

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
03 Dec 2013, 10:31

1

This post received KUDOS

Stmt 1 is obviously insufficient. So i wont discuss that.

Lets see stmt 2) Ounce for ounce, the supermarket sells 25 percent more of its own brand than of the leading brand Information we already have- leading brand make 15% profit per box own brand make 10% profit per box

We are not told how many boxes of each are present. Suppose, own brand sells 125 ounces. So leading brand 100 ounces. Now if the 125 ounce of own brand can fit in just 10 boxes and leading brand's 100 ounces in 50 boxes. Leading brand wins. If the reverse or even worse(1 leading box and 125 own brand boxes), own brand wins. HENCE Insufficient.

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
13 Jan 2014, 11:36

zerosleep wrote:

Stmt 1 is obviously insufficient. So i wont discuss that.

Lets see stmt 2) Ounce for ounce, the supermarket sells 25 percent more of its own brand than of the leading brand Information we already have- leading brand make 15% profit per box own brand make 10% profit per box

We are not told how many boxes of each are present. Suppose, own brand sells 125 ounces. So leading brand 100 ounces. Now if the 125 ounce of own brand can fit in just 10 boxes and leading brand's 100 ounces in 50 boxes. Leading brand wins. If the reverse or even worse(1 leading box and 125 own brand boxes), own brand wins. HENCE Insufficient.

SO ans- E Thanks.

Could you elaborate a bit more on statement 2 @zerosleep?, Also do you find the wording ambiguous? Check my posts from before. I think that this question is a bit tricky

Re: A supermarket sells both a leading brand of laundry powder a [#permalink]
17 May 2014, 01:37

The answer here should be C.

Lets say that the cost of own brand is X $ and for the leading brand Y $.

(1) tells us only that Y is more than X (not sufficient alone) (2) profit from own brand is X/10 $ and profit from leading brand is 3Y/20 $. If leading brand is sold "N" amount, than own brand is sold "5N/4".

X/10 * 5N/4=XN/8 3Y/20 * N = 3YN/20~YN/7

(2) is also insufficient as we don't know which is is greater X or Y

(1)+(2) is sufficient, as we can say that Leading Brand generates more profit.

gmatclubot

Re: A supermarket sells both a leading brand of laundry powder a
[#permalink]
17 May 2014, 01:37