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Last year, a certain company began manufacturing product X

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Joined: 20 May 2012
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Kudos [?]: 5 [0], given: 9

Last year, a certain company began manufacturing product X [#permalink] New post 05 Jun 2012, 14:09
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Question Stats:

67% (01:18) correct 33% (02:04) wrong based on 12 sessions
Last year, a certain company began manufacturing product X and sold every unit of product X that it produced. Last year the company's total expenses for manufacturing product X were equal to $100,000 plus 5% of the company's total revenue from all units of product X sold. If the company made a profit on product X last year, did the company sell more than 21000 units of product X?

(1) The company's total revenue from the sale of product X last year was greater than $110,000
(2) For each unit of product X sold last year, the company's revenue was $5
[Reveal] Spoiler: OA
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Senior Manager
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Joined: 28 Mar 2012
Posts: 285
Concentration: Entrepreneurship
GMAT 1: 640 Q50 V26
GMAT 2: 660 Q50 V28
GMAT 3: 730 Q50 V38
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Kudos [?]: 163 [2] , given: 23

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Re: Yes/No data DS [#permalink] New post 05 Jun 2012, 21:09
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Hi,

It is given that the total expense for the company = 100,000 + 5% of total revenue (let say, x)
Also, the project made profit.
Profit = Total revenue - expenses = x - (100000 + 0.05x) = 0.95x - 100000
Since profit > 0
therefore, 0.95x - 100000 > 0 ...(a)

using (1) The company's total revenue from the sale of product X last year was greater than $110,000,
we can only check whether 0.95x - 100000 is positive or not. Insufficient.

using (2) For each unit of product X sold last year, the company's revenue was $5,
lets find the minimum number of units,
number of units = total revenue/5 = x/5
or 0.95(x/5) - 100000 >0 ....(from (a))
or x > 21052, thus x is greater than 21000. Sufficient.

Answer (B)

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Re: Yes/No data DS   [#permalink] 05 Jun 2012, 21:09
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