A company makes two types of bicycles, racing bikes and

A for me.

(1) The company's total revenue from bicycle sales in 2006 was between $11 million and $13 million and 10% higher than it was in 2005.
SUFFICIENT

Let T=total revenue, M=revenue from mountain bikes, and R=revenue from racing bikes for Year 2005.

Then for 2006, the figures will be,
1.1T, 1.05M, and 1.20R.

Set up the equations.
M+R=T
1.05M+1.2R=1.1T
1.1T=11~13

Three unknowns, three equations -> solvable.

Let's test the range for the total revenue in 2006.
Let 1.1T=11.
Then, T=10.
Solve M+R=10
1.05M+1.20R=11
R=3.3333 < 4

Let 1.1T=13
Then, T=11.8 approx.
Solve M+R=11.8
1.05M+1.20R=13
R=2.6666 < 4

Therefore, the revenue from racing bike sales did NOT exceed 4 million in 2006.

(2) More than 40% of the bicycles that the company sold in 2006 were racing bikes.
INSUFFICIENT
We don't know how much racing bikes sell for, let alone the total revenue in 2006.

Therefore, A.

St1:
Taking the worst case revenue of $11m, we know in in 2005, the revenue was $9.9m

So if revenues of racing bikes = r, then revenues of mountain bikes = 9.9-r

In 2006, revenues of racing bikes = 1.2r and revenues of mountina bikes = 1.05(9.9-r)

So total revenue in 2006 = 1.2r + 1.05(9.9-r) = 11

We can solve for r. Sufficient.

St2:
We are still in the murky region here since all we know is the percentage of racing bikes:mountain bikes sold (in fact, even this figure is murky because we are told more than 40% are racing bikes). Nothing else is revealed. Insufficient.

Ans A