GetThisDone wrote:
The head baker at Barry's Bagels can either purchase flour in-person from the local flour mill, Larry's Local Mill, or order a shipment of flour from an out-of-state mill, Isadore's Interstate Mill. The cost of the flour from Isadore's Interstate Mill is 10 percent less than the cost of the flour from Larry's Local Mill. Even after shipping and handling fees are added, it is still cheaper to order flour that has to be shipped from Isadore's than to buy flour locally from Larry's.
The statements above, if true, best support which of the following assertions?
A. Production costs at Isadore's Interstate Mill are 10 percent below those at Larry's Local Mill.
B. Buying flour from Isadore's Interstate Mill will eliminate 10 percent of the local flour mill jobs.
C. The shipping and handling fees for a batch of flour purchased from Isadore's Interstate Mill are less than 10 percent of the cost of an identical batch of flour purchased from Larry's Local Mill.
D. The shipping and handling fees for a batch of flour purchased from Isadore's Interstate Mill are more than 10 percent of the cost of Isadore's flour.
E. Isadore's Interstate Mill produces flour 10% more efficiently than Larry's Local Mill does.
Main CR Qs link - Main link -
https://gmatclub.com/forum/cr-qs-600-700 ... 31508.htmlOFFICIAL EXPLANATION
The cost of flour from the local mill is higher than the cost of the flour from the out-of-state mill. However, when purchasing from the out-of-state mill, Barry’s Bagels must pay shipping and handling fees that would not apply to a purchase from the local mill. Purchasing the flour from the out-of-state mill will only be cheaper if those shipping and handling fees are smaller than the difference in the flour costs of the two suppliers. Also, we cannot assume any additional information or move beyond the scope of the given premises in order to find the conclusion.
(A) Lower production costs could explain the lower price of the flour from Isadore’s Interstate Mill, but there may be a variety of other reasons. We cannot state this conclusively.
(B) It is possible that the number of local flour mill jobs would be decreased, but no evidence in the passage leads to that conclusion.
(C) CORRECT. This statement properly identifies the point that, for ordering from an out-of-state mill to be less expensive, the shipping and handling fees must be less than the difference in the flour costs of the two suppliers. Say, for example, that a batch of flour costs $100 from Larry’s Local Mill. The passage tells us that the same batch would cost $90 from Isadore’s Interstate Mill, yet when purchasing from Isadore’s, shipping and handling fees would apply. We are told that Isadore’s total cost is cheaper than Larry’s, so mathematically that is: $90 + Shipping & Handling < $100, which means that Shipping & Handling < $10 = 10% of the cost of flour from Larry’s.
(D) If shipping and handling fees were more than 10 percent, purchasing from the out-of-state supplier would be more expensive, not less.
(E) Higher efficiency could explain the lower price of the flour from Isadore’s Interstate Mill, but there may be a variety of other reasons. We cannot state this conclusively.