Find all School-related info fast with the new School-Specific MBA Forum

It is currently 23 Oct 2014, 00:43

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

The total cost of producing item X is equal to the sum of

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Intern
Intern
avatar
Joined: 22 Apr 2008
Posts: 36
Followers: 0

Kudos [?]: 17 [0], given: 0

The total cost of producing item X is equal to the sum of [#permalink] New post 11 Aug 2008, 00:35
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
The total cost of producing item X is equal to the sum of item X's fixed cost and variable cost. If the variable cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in January?

(1) The fixed cost of producing item X increased by 13% in January.

(2) Before the changes in January, the fixed cost of producing item X was 5 times the variable cost of producing item X.


Total = Fixed + Variable .... given


Variable (new) = 0.95 Variable (old)


Stmt 1 - is not suff individual % changes in Fixed and Variable is not suff to cal % change in Total

Total ( new) = 1.13 Fixed(old) + 0.95 Variable(old)

% change = ( Total (new) - Total (old) )/ Total (old)

above cannot be cal hence not poss

Stmt 2

Fixed (old) = 5*Varaible (old)

Hence Total (old) = 6 Variable (old)

Total(new) = 6 *0.95 * Variable(old)

using Total (new) and Total (old) we can calculate % change...

Hence B

Is above reasoning correct?

Please help as OA is C

Thanks
Senior Manager
Senior Manager
avatar
Joined: 06 Apr 2008
Posts: 452
Followers: 1

Kudos [?]: 51 [0], given: 1

Re: DS [#permalink] New post 11 Aug 2008, 00:50
sjgmat wrote:
The total cost of producing item X is equal to the sum of item X's fixed cost and variable cost. If the variable cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in January?

(1) The fixed cost of producing item X increased by 13% in January.

(2) Before the changes in January, the fixed cost of producing item X was 5 times the variable cost of producing item X.


Total = Fixed + Variable .... given


Variable (new) = 0.95 Variable (old)


Stmt 1 - is not suff individual % changes in Fixed and Variable is not suff to cal % change in Total

Total ( new) = 1.13 Fixed(old) + 0.95 Variable(old)

% change = ( Total (new) - Total (old) )/ Total (old)

above cannot be cal hence not poss

Stmt 2

Fixed (old) = 5*Varaible (old)

Hence Total (old) = 6 Variable (old)

Total(new) = 6 *0.95 * Variable(old)

using Total (new) and Total (old) we can calculate % change...

Hence B

Is above reasoning correct?

Please help as OA is C

Thanks


OA is rightly C) because statement 2) talks about before changes in January and Q is percent variation after changes in January.

Therefore you need both 1) and 2)
Intern
Intern
avatar
Joined: 22 Apr 2008
Posts: 36
Followers: 0

Kudos [?]: 17 [0], given: 0

Re: DS [#permalink] New post 11 Aug 2008, 00:58
nmohindru wrote:
sjgmat wrote:
The total cost of producing item X is equal to the sum of item X's fixed cost and variable cost. If the variable cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in January?

(1) The fixed cost of producing item X increased by 13% in January.

(2) Before the changes in January, the fixed cost of producing item X was 5 times the variable cost of producing item X.


Total = Fixed + Variable .... given


Variable (new) = 0.95 Variable (old)


Stmt 1 - is not suff individual % changes in Fixed and Variable is not suff to cal % change in Total

Total ( new) = 1.13 Fixed(old) + 0.95 Variable(old)

% change = ( Total (new) - Total (old) )/ Total (old)

above cannot be cal hence not poss

Stmt 2

Fixed (old) = 5*Varaible (old)

Hence Total (old) = 6 Variable (old)

Total(new) = 6 *0.95 * Variable(old)

using Total (new) and Total (old) we can calculate % change...

Hence B

Is above reasoning correct?

Please help as OA is C

Thanks


OA is rightly C) because statement 2) talks about before changes in January and Q is percent variation after changes in January.

Therefore you need both 1) and 2)


Thats correct we are given relation between Fixed and Variable cost before January, but 5% change in Variable is after January

So while calculating Total(new) I am considering 5% decrease in cost of Variable.

If I am not mistaken, you mean to say that I can't consider the relation between Fixed and Variable cost after January??

I am sorry but I am still unable to understand why OA - C

can you please explain with some details/examples

Thanks a lot
Senior Manager
Senior Manager
avatar
Joined: 06 Apr 2008
Posts: 452
Followers: 1

Kudos [?]: 51 [0], given: 1

Re: DS [#permalink] New post 11 Aug 2008, 01:15
sjgmat wrote:
Thats correct we are given relation between Fixed and Variable cost before January, but 5% change in Variable is after January

So while calculating Total(new) I am considering 5% decrease in cost of Variable.

If I am not mistaken, you mean to say that I can't consider the relation between Fixed and Variable cost after January??

I am sorry but I am still unable to understand why OA - C

can you please explain with some details/examples

Thanks a lot


No what I mean is you have to consider changes in January for fixed cost as well. These changes are given in statement 1) so statement 1) is required
Intern
Intern
avatar
Joined: 10 Aug 2008
Posts: 22
Schools: Emory Goizueta (Class of 2013)
WE 1: Management consultant
WE 2: Marketing consultant
Followers: 0

Kudos [?]: 0 [0], given: 1

Re: DS [#permalink] New post 11 Aug 2008, 06:25
Agree. Choosing B means that you assume the fixed cost remains unchanged in January. However, there is no stated evidence for such case.
Re: DS   [#permalink] 11 Aug 2008, 06:25
    Similar topics Author Replies Last post
Similar
Topics:
11 Experts publish their posts in the topic The total cost of producing item X is equal to the sum of it GMATD11 7 03 Oct 2011, 06:26
19 Experts publish their posts in the topic The total cost of producing item X is equal to the sum of knabi 31 18 Jul 2010, 19:54
The total cost of producing item X is equal to the sum of apshma 3 13 Jan 2009, 00:54
The total cost of producing item X is equal to the sum of leonidas 2 28 Sep 2008, 18:39
1 Experts publish their posts in the topic The total cost of producing item Y is equal to the sum of alexperi 7 08 Dec 2007, 11:12
Display posts from previous: Sort by

The total cost of producing item X is equal to the sum of

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.