A certain company that sells only cars and trucks reported that revenu

Well, I cannot say its exactly a short method, but looking at the options one can surmise the ans.
Take 100 as base figure. Now try the options.
You can say that "The drop produced by less revenue by Car sales" MUST BE Surpassed by" The gain from Truck Sales". to achieve the Net Gain Effect.
i.e the proportion of Truck Revenue has to be greater than Car Revenue.

By this you can directly eliminate C,D and E. Now for remaining options,
Say we start from B. Then 4:5 will mean :
Rev 400 for cars and Rev 500 for Trucks
Calculate 11% @ 400 and 7% @500. We just have to ensure that
7% @ Trucks MUST BE > 11% @ Cars. Right !!!

T+C=R
89C+107T=101R
12C=6T
C/T=6/12=1:2

So Answer is A

Its 1/2
Consider the revenue from cars in 1996 x, which reduced to 0.89x in 1997.

Consider the revenue from trucks in 1996 y, which rose to 1.07y in 1997.

Another piece of information that is given is that the total revenue which was (x+y) in 1996, rose to 1.01(x+y) in 1997.
We are required to find x/y.

So using these information, we get \(0.89x +1.07y=1.01x +1.01y\).
On solving we get x/y as 1/2.
+1A

Responding to a pm:


Cars denoted by 1 and trucks by 2

w1/w2 = (A2 - Aavg)/(Aavg - A1)
Revenue of cars/Revenue of trucks = (Revenue change of trucks - Avg)/(Avg - Revenue change of cars)
Revenue of cars/Revenue of trucks = (7 - 1)/(1 - (-11))
Notice the highlighted part above. Revenue of trucks changes by +7% and that of cars by -11%.

Let us say that the revenues from selling cars was $ 100x and from trucks was $100y in 1996, total revenue: 100x + 100y

Revenue in 1997:
cars: $ 89x trucks: $ 107y total revenue: 89x + 107y = 101x + 101y

Solving the above total revenue equation we get: 12x = 6y i.e. x/y = 1/2

Answer is A.

Answer = (A) 1:2

Please refer chart below:

The company sells only cars and trucks.
Let c = revenue from car sales in 1996
Let t = revenue from truck sales in 1996
Equating the total revenue in 1997 with the individual revenue from selling cars and trucks in 1997,
c(0.89) + t(1.07) = (c+t) (1.01)
Dividing throughout by t,
(c/t) (0.89) + 1.07 = (c/t + 1) (1.01)
=> (c/t) (0.12) = 0.06
=> (c/t) = 1/2

Option (A).

This is a weighted average question. Average of -11% and +7% is +1%.
Using w1/w2 = (A2 - Aavg)/(Aavg - A1),
we get w1/w2 = (7 - 1)/(1- (-11)) = 6/12
Revenue from Car:Revenue from Trucks = 1:2

For another discussion on the same question, check: https://gmatclub.com/forum/a-certain-com ... ml#p541483

This is how my brain processed this one,

Step 1 --> Set up the equations.

In 1996: R = C+T
In 1997: 1.01R = .89C+1.07T

Remember we are looking for C/T.

Step 2 --> Substitute

1.01(C+T) = .89C+1.07T or,
1.01C + 1.01T = .89C+1.07T

Step 3 --> Solve

.12C = .06T
.12C/T = .06
C/T = .06/.12
C/T = 1/2 or 1:2

Answer is (A)

Car-------------------------------Truck
(-11%)-----------------------------(+7%)
-------------------------(+1%)-------- (Wtd Avg)
--------(12%)------------/----(6%)--
Thus ratio of Car Sales/Truck Sales = 6/12= 1/2

FWIW, this is one of the fastest and easiest way to solve such problems

Straight forward weighted average approach
Car Total Truck
-11------ 1------ 7
-----12------6----
So Car/ Truck = 6/12 = 1:2
Ans: A

This problem can be solved in less than one minutes by drawing a graph.

We can let the revenue from car sales in 1996 = c and the revenue from truck sales in 1996 = t.

Since revenue from car sales in 1997 was down 11 percent from 1996, revenue from truck sales in 1997 was up 7 percent from 1996, and total revenue from car and trucks sales in 1997 was up 1 percent from 1996, we can create the following equation:

0.89c + 1.07t = 1.01(c + t)

89c + 107t = 101(c + t)

89c + 107t = 101c + 101t

6t = 12c

t = 2c

1/2 = c/t

Thus, the ratio of revenue of car sales to truck sales in 1996 is 1 : 2.

Answer: A

Responding to a pm:



The last step has the error.

New Revenue is 1% more than Old Revenue

0.89x+1.07y = (x + y) + 1% of (x + y)
0.89x+1.07y = 1.01 * (x + y)
0.12x = 0.06y
x/y = 1/2

Here is an easy solution

Hi All,

We're told that a certain company that sells only cars and trucks reported that revenues from car sales in 1997 were down 11 percent from 1996 and revenues from truck sales in 1997 were up 7 percent from 1996. If total revenues from car sales and trucks sales in 1997 were up 1 percent from 1996, what is the RATIO of revenue from CAR sales in 1996 to revenue from TRUCK sales in 1996?

This prompt does NOT give us any information about the actual revenues for car sales or truck sales in 1996, so we'll end up using a mix of TESTing VALUES and TESTing THE ANSWERS in a moment. Based on the information in the prompt, if those two revenue values from 1996 were EQUAL though, then we can run a quick calculation on what the results would have been in 1997.

IF in 1996....
Car revenue = $100
Truck Revenue = $100
Total Revenue = $200

then the revenue in 1997 would have been...
Car revenue = 11% drop = $89
Truck Revenue = 7% gain = $107
Total revenue = $196

This is a 2% DROP from the year before, but the prompt states that it's supposed to be a 1% GAIN. To 'offset' the 11% drop in car revenue, we clearly need there to be a LARGER amount of Truck revenue. So the ratio of car revenue to truck revenue must be SMALLER than 1:1 (e.g. 1:2, 2:3, 2:5 4:7, etc.). Thus, the correct answer is either A or B.

Let's TEST Answer A:

IF in 1996....
Car revenue = $100
Truck Revenue = $200
Total Revenue = $300

then the revenue in 1997 would have been...
Car revenue = 11% drop = $89
Truck Revenue = 7% gain = $214
Total revenue = $303

This is a 1% gain from the year before - and this matches what we were told, so this MUST be the answer.

Final Answer:

GMAT assassins aren't born, they're made,
Rich

Responding to a pm:


Notice that the formula clearly states (Aavg - A1) in the denominator. So whatever Aavg is, from that you must subtract A1, whatever A1 is - positive or negative. If A1 is negative, you still need to subtract it from Aavg (effectively adding it).
The negative or positive signs of A1, A2 and Aavg do not change the formula.