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Director
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Holiday receipts the total sales recorded in the fourth [#permalink]
 05 Oct 2005, 17:50
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0% (00:00) correct
 0% (00:00) wrong based on 1 sessions
Holiday receipts—the total sales recorded in the fourth quarter of the year—determine the economic success or failure of many retail businesses. Camco, a retailer selling just one camera model, is an excellent example. Camco’s holiday receipts, on average, account for a third of its yearly total receipts and about half of its yearly profits.
If the statements above are true, which of the following must also be true about Camco on the basis of them?
(A) Its fixed expenses per camera sold are higher during the fourth quarter than for any of the other three quarters.
(B) It makes more profit during the first and third quarters combined than during the fourth quarter.
(C) Its per-camera retail price is lower, on average, during the fourth quarter than during any one of the first three quarters.
(D) It makes less profit, on average, for a given dollar amount of sales during the first three quarters combined than during the fourth quarter.
(E) The per-camera price it pays to wholesalers is higher, on average, during the fourth quarter than during any of the other three quarters.
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Cheers, Rahul.
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Manager
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D?
Camco makes 1/2 of the profits in the 4th on 1/3 or its total sales. It makes the other 1/2 of the profits in quarter 1,2, and 3 but on 2/3 of its total revenue. So for a given amount (such as 1/3 sales) the profit in the 4th is higher then in the others.
A) If fixed expenses per camera are higher in the 4th quarter, then in the other three quarters, then profits of the 4th quarter cannot be equal to the profits of the other three.
B) If 1st and 3rd quarter makes more profit then the 4th quater, then 2nd quarter must've been a loss. (I assume this is not the case...)
C) if the camera price is lower in 4th, then the profit cannot equal that of the other three quaters.
E) If the costs of the camera is higher in 4th, then the profit is lower. Same as C), but increasing costs rather then decreasing revenue.
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GMAT Club Legend
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(A) - can't tell
(B) - can't tell
(C) - can' tell
(D) - best choice
(E) - can't tell
I'll take D. It's the only choice that must be true. The rest jsut can't be supported for based on the passage.
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Director
Joined: 21 Aug 2005
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D is my answer.
A - If expenses were higher, then profit would have been lower. This goes against the fact that 1/2 the yearly profits are realized in 4th qtr.
B - False as per the argument
C - Doesn't help. If camera is sold at a lower proce, profits may not be as high are they are during the 4th Q.
E - Why does the wholesaler come in to picture?
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Manager
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go D go....
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Senior Manager
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Re: CR - Holiday receipts [#permalink]
06 Oct 2005, 08:22
Go with D
A doesnt make sense.
B we dont know
C we dont know
E we dont know
rahulraao wrote: Holiday receipts—the total sales recorded in the fourth quarter of the year—determine the economic success or failure of many retail businesses. Camco, a retailer selling just one camera model, is an excellent example. Camco’s holiday receipts, on average, account for a third of its yearly total receipts and about half of its yearly profits.
If the statements above are true, which of the following must also be true about Camco on the basis of them?
(A) Its fixed expenses per camera sold are higher during the fourth quarter than for any of the other three quarters.
(B) It makes more profit during the first and third quarters combined than during the fourth quarter.
(C) Its per-camera retail price is lower, on average, during the fourth quarter than during any one of the first three quarters.
(D) It makes less profit, on average, for a given dollar amount of sales during the first three quarters combined than during the fourth quarter.
(E) The per-camera price it pays to wholesalers is higher, on average, during the fourth quarter than during any of the other three quarters.
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Senior Manager
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D imo too
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Fear Mediocrity, Respect Ignorance
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Current Student
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D by POE.
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SVP
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clear D for me
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hey ya......
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