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# In 2003, the Making Hits Record Company spent 40% of its

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In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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10 Oct 2009, 22:28
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In 2003, the Making Hits Record Company spent 40% of its total budget on the production of ten albums, 30% of its budget on the marketing of these albums, and the remainder of its budget on overhead costs. In the same year, the Song Factory Record Company spent 20% of its total budget on the production of 10 albums and 60% of its budget on the marketing of these albums. Making Hits sold a total of 800,000 copies of the ten records it produced in 2003, while the Song Factory sold a total of 1,600,000 copies of the ten records it produced in 2003.

Assuming each company met its budget, which of the following conclusions is best supported by the information given above?

(A) The amount of money spent on marketing is directly related to the number of copies sold.
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
(E) The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory
spent a higher percentage of its budget on the marketing of its albums.
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11 Oct 2009, 01:31
In 2003, the Making Hits Record Company spent 40% of its total budget on the production of ten albums, 30% of its budget on the marketing of these albums, and the remainder of its budget on overhead costs. In the same year, the Song Factory Record Company spent 20% of its total budget on the production of 10 albums and 60% of its budget on the marketing of these albums. Making Hits sold a total of 800,000 copies of the ten records it produced in 2003, while the Song Factory sold a total of 1,600,000 copies of the ten records it produced in 2003.

Assuming each company met its budget, which of the following conclusions is best supported by the information given above?

(A) The amount of money spent on marketing is directly related to the number of copies sold.
( The deals with percentages so it is a very hard decision to take)
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
(40% of its total budget may or may not be greater than 20% of its total budget)
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
( Cannot be said. Number of copies is higher does not indicate the total revenues are greater)
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
(E) The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory spent a higher percentage of its budget on the marketing of its albums.( This seems good to me)
Reasonable conclusion to take. Will go for E.
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11 Oct 2009, 02:21
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I will go with D on this one.

Even if nothing is mentioned specifically about the overhead costs of SFRC, we get a clear hint that the overhead costs can be max 20% ( in case there are no other costs involved ) or 0% ( in case other costs are involved ). The budget cant overshoot 100%, so D makes sense.
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11 Oct 2009, 09:13
IMO E..OA pls
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11 Oct 2009, 09:24
Economist wrote:
I will go with D on this one.

Even if nothing is mentioned specifically about the overhead costs of SFRC, we get a clear hint that the overhead costs can be max 20% ( in case there are no other costs involved ) or 0% ( in case other costs are involved ). The budget cant overshoot 100%, so D makes sense.

Yes, D it is. Good explanation. A and E both looks attractive but D is correct one.
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11 Oct 2009, 11:20
I shall switch to D.
E indicated the marketing as only cause of increase in sales...but sales may increase due to other factors!
OA pls
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11 Oct 2009, 18:30
Yes Guys.

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29 Nov 2009, 05:41
Mega2010 wrote:
In 2003, the Making Hits Record Company spent 40% of its total budget on the production of ten albums, 30% of its budget on the marketing of these albums, and the remainder of its budget on overhead costs. In the same year, the Song Factory Record Company spent 20% of its total budget on the production of 10 albums and 60% of its budget on the marketing of these albums. Making Hits sold a total of 800,000 copies of the ten records it produced in 2003, while the Song Factory sold a total of 1,600,000 copies of the ten records it produced in 2003.

Assuming each company met its budget, which of the following conclusions is best supported by the information given above?

(A) The amount of money spent on marketing is directly related to the number of copies sold.
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
(E) The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory
spent a higher percentage of its budget on the marketing of its albums.

I choose D as my answer. For example, The Making Hit Record Company spent 40% of its budget on the production of 10 albums, 30% on marketing, while the remainder percentage, which is 30% on overhead costs. We can also calculate the overhead costs for The Song Factor to be 20%. The problem with E is that we can't tell what's causing The Song Factory to seel more copies. We just know that they did.
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29 Nov 2009, 05:54
Mega2010 wrote:
In 2003, the Making Hits Record Company spent 40% of its total budget on the production of ten albums, 30% of its budget on the marketing of these albums, and the remainder of its budget on overhead costs. In the same year, the Song Factory Record Company spent 20% of its total budget on the production of 10 albums and 60% of its budget on the marketing of these albums. Making Hits sold a total of 800,000 copies of the ten records it produced in 2003, while the Song Factory sold a total of 1,600,000 copies of the ten records it produced in 2003.

Assuming each company met its budget, which of the following conclusions is best supported by the information given above?

(A) The amount of money spent on marketing is directly related to the number of copies sold.
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
(E) The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory
spent a higher percentage of its budget on the marketing of its albums.

I choose D as my answer. For example, The Making Hit Record Company spent 40% of its budget on the production of 10 albums, 30% on marketing, while the remainder percentage, which is 30% on overhead costs. We can also calculate the overhead costs for The Song Factor to be 20%. The problem with E is that we can't tell what's causing The Song Factory to sell more copies. We just know that they did.
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29 Apr 2011, 08:54
D is more direct and E is kind of shell game.
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01 Sep 2011, 13:34
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D is the only missing factor: overhead costs. so D
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Dec 2011, 00:17
This one is a direct D. Arrange the costs as follows:

Name Of Company-------------Production Costs-----Marketing Costs-----Overhead Costs-----Number of Copies Sold

Making Hits Record Company----40-------------------------30----------------------30----------------------800,000
Song Factory Record Company---20-------------------------60----------------------20----------------------1,600,000

All the costs are expressed in percentage (%).

Thus, according to the overhead costs for each of the companies, we can see that Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. That is exactly what D says. Simple arithmetic and data arrangement help us solve this problem quickly too.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Dec 2011, 00:38
D for me also
A ) this talks about amount, but we have all info in %age
B ) cant be concluded as again we have all information in %age
C ) cant be concluded as we don’t have information on selling price.
D ) Yes as it’s stating the obvious 30 % versus 20% overhead.
E ) possible but again to much assumption we need to do
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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21 Jan 2012, 01:41
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siddharthmuzumdar wrote:
This one is a direct D. Arrange the costs as follows:

Name Of Company-------------Production Costs-----Marketing Costs-----Overhead Costs-----Number of Copies Sold

Making Hits Record Company----40-------------------------30----------------------30----------------------800,000
Song Factory Record Company---20-------------------------60----------------------20----------------------1,600,000

All the costs are expressed in percentage (%).

Thus, according to the overhead costs for each of the companies, we can see that Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. That is exactly what D says. Simple arithmetic and data arrangement help us solve this problem quickly too.

But why are we assuming that the Total budget of Making Hits = Total budget of Song factory?
eg. Total budget of Making Hits = 100 , 30% of 100 --> 30
Total budget of Song factory= 200 , 20% of 200 --> 40
Then how come D is the ans?
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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21 Jan 2012, 03:13
D for me.
A) we can't prove this from the infromation given.

b) we can't trust percentages. if song factory's budget is more than Making hit's, then the $amount (represented by 20%) is more than the$ amount spent by making hit (40%)

C)higher numbers doesn't mean higher revenue. making hit could have sold 800,000 $50 a copy, and song factory could have sold its 1,600,000 copies for$5 a copy.

D)true, comparing percentages with percentages

E) again, we can't compare numbers with percentages

hope this helps
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Jan 2012, 04:45
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Let X and Y be the budgets of MHRC and SFRC respectively.
MHRCo. spent 40% of X ----- production of ten albums
30% of X ----- marketing
20% of X ----- Overhead costs
Sold 800,000 copies

SFRCo. spent 20% of Y ----- production of 10 albums
60% of Y ----- marketing
80% of Y ----- Overhead Costs
Sold 1,600,000 copies

Assuming each company met its budget, which of the following conclusions is best supported by the information given above? Hence, we should not assume anything other than what is mentioned in the stimulus.

(A) The amount of money spent on marketing is directly related to the number of copies sold. We don't know X, Y. So we can't say anything about the amount of money spent.
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory. Same argument here too. We don't know X and Y.
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits. We don't know what the selling prices were, so we cannot conclude anything from this statement.
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. We know that MHRC spent 30% of X on OC and that SFRC spent 20% of Y on OC. True!
(E) The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory
spent a higher percentage of its budget on the marketing of its albums. Again, we don't know X and Y
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Jan 2012, 19:48
+1 D
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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30 Jan 2012, 23:09
+1D
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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31 Jan 2012, 07:43
I go with D too. One of the important concept to be noted is the difference between the absolute amount and the percentage.There is no additional data given for us to confirm surely that an increase in the sales is a result of the increase in the spending of marketing .
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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29 Oct 2012, 04:43
Mega2010 wrote:
In 2003, the Making Hits Record Company spent 40% of its total budget on the production of ten albums, 30% of its budget on the marketing of these albums, and the remainder of its budget on overhead costs. In the same year, the Song Factory Record Company spent 20% of its total budget on the production of 10 albums and 60% of its budget on the marketing of these albums. Making Hits sold a total of 800,000 copies of the ten records it produced in 2003, while the Song Factory sold a total of 1,600,000 copies of the ten records it produced in 2003.

Assuming each company met its budget, which of the following conclusions is best supported by the information given above?

(A) The amount of money spent on marketing is directly related to the number of copies sold.
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
(E) The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory
spent a higher percentage of its budget on the marketing of its albums.

I got D found OE, so posting it.

When drawing a conclusion, we must remember not to conclude too much; i.e.,
do not make unwarranted assumptions. In this case, we are looking for the
conclusion that must be true based only on the information given in the passage
(A) While we are given information about the percentage of the total budgets
spent on marketing, we have no information about the actual amount of money
either company spent on marketing.
(B) While we are given information about the percentage of the total budgets
spent on production, we have no information about the actual amount of money
either company spent on production.
(C) Because we have no information on the sale price per copy for either
company, we cannot make any conclusions about the revenue generated by
either company. It’s very possible that Making Hits sold its copies at twice the
price of the Song Factory copies, in which case the revenues for the two
companies would be the same.
(D) CORRECT. Since Making Hits spent 40% of its budget on production, 30% on
marketing, and the rest on overhead, we can conclude that Making Hits spent
30% of its budget on overhead. Since the Song Factory spent 20% of its budget
on production and 60% on marketing, and met its budget, it could not have
spent more than 20% on overhead. Therefore, Making Hits spent a higher
percentage of its budget on overhead than did the Song Factory.
(E) A valid conclusion must be true. While it is possible, and perhaps even likely,
that the percentage of the budget spent on marketing was a driver of sales, this
is not necessarily true; there are many other factors that could have affected
sales. For example, it is possible that the Song Factory sold more copies of its 10
albums because the music was better than the music produced at Making Hits,
and not because the Song Factory spent a higher percentage on marketing.
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Re: In 2003, the Making Hits Record Company spent 40% of its   [#permalink] 29 Oct 2012, 04:43

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