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.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

The total cost of producing item X is equal to the sum of it [#permalink]
03 Oct 2011, 06:26

1

This post received KUDOS

8

This post was BOOKMARKED

00:00

A

B

C

D

E

Difficulty:

55% (hard)

Question Stats:

57% (01:55) correct
43% (01:19) wrong based on 215 sessions

The total cost of producing item X is equal to the sum of item X's overhead cost and production cost. If the production cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in that same month?

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

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

Re: Total Cost of Producing item X [#permalink]
03 Oct 2011, 06:51

1

This post received KUDOS

2

This post was BOOKMARKED

Total Cost = T Production Cost = P Overhead Cost = O

from the question we have: T = P + Q Statement 1: T1 = .95P +1.13Q change = T - T1 => 0.05P -0.13Q hence as we have 2 unknown calculation of % increase/decrease not possible insufficient. Statement 2: O = 5P therefore T = P + O => T = P+5P decrease in production cost is known but increase or decrease in overhead is still unknown. We cannot apply the decrease in production cost to the increase/decrease of overhead cost.

hence the actual change will remain unknown. Hence insufficient

Statement 1&2 together. We have the relation ship between P and O and also there individual increase/decrease % Hence sufficient

Re: Total Cost of Producing item X [#permalink]
04 Oct 2011, 19:17

A is insufficient because it doesn't tell us how the overhead and production costs relate

B is insufficient because it doesn't tell us how much the overhead costs changed

The answer is C, because with A and B together we know by what percentage both the overhead and production costs increased, as well as how they are proportional to each other.

Re: Total Cost of Producing item X [#permalink]
05 Oct 2011, 02:15

1

This post received KUDOS

Expert's post

2

This post was BOOKMARKED

GMATD11 wrote:

The total cost of producing item X is equal to the sum of item X's overhead cost and production cost. If the production cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in that same month?

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

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

Guys i marked B but its wrong.

Pls discuss

The reason 'B' is not the answer is that you are not allowed to 'assume' anything in DS questions. You know that production cost increased by 5%. Using statement 2, you also see that production cost is a sixth of the total cost. So you assume that you know the change in the total cost. But remember, you are assuming here that overhead cost hasn't changed. Since you do not know whether overhead cost is the same or has changed, you cannot say anything about the decrease/increase in the overall cost. Even if you overlooked this, statement 1 should have reminded you that overhead cost could have changed too. Hence the answer has to be (c). _________________

Re: The total cost of producing item X [#permalink]
15 May 2013, 00:28

6

This post received KUDOS

WarriorGmat wrote:

The total cost of producing item X is equal to the sum of item X's overhead cost and production cost. If the production cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in that same month?

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

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

T = Total costs O = Overhead costs P = production costs

given:- P changes to 0.95P To find:- T changes to what??

AD/BCE

statement 1:- O changes to 1.13O

so T change can be calculated by \(((P+O) - (0.95P + 1.13O))/ (P+O)\)

which gives \((0.95P + 1.13O)/ (P+O)\) ---------- 1 we cannot calculate the value here. So A alone is not sufficient. AD out

statement 2:- O is 5 times P . O = 5P We don't know what the changes in O are to calculate changes in T using B alone. So B is out.

1 and 2 combined

we can substitute the value of O in the 1st equation. In the numerator and denominator we can cancel P therby we can get a numerical value. So C is the answer _________________

"Kudos" will help me a lot!!!!!!Please donate some!!!

Completed Official Quant Review OG - Quant

In Progress Official Verbal Review OG 13th ed MGMAT IR AWA Structure

Yet to do 100 700+ SC questions MR Verbal MR Quant

Re: The total cost of producing item X [#permalink]
15 May 2013, 00:30

WarriorGmat wrote:

The total cost of producing item X is equal to the sum of item X's overhead cost and production cost. If the production cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in that same month? (1) The overhead cost of producing item X increased by 13% in January. (2) Before the changes in January, the overhead cost of producing item X was 5 times the production cost of producing item X.

The answer would be [C]. Let the total cost of Production be X = O + P where, O - Overhead Cost P - Production Cost

In Jan, X1 = O1 + P1 = O1 + 95*P/100.

Statement 1: Now currently the above equation has 2 variables which determine the value of X. Statement 1 offers the rate of increase of O in Jan. But in the end, no relation can be established between O and P to represent X in common terms. Hence, its insufficient. The equation at this stage can be represented as:

X1 = 113*O/100 + 95*P/100, where X1 is the total cost of Product in Jan.

Statement 2 establishes a relation between O and P i.e. O = 5P, individually the above is insufficient since, we are unsure as to what changes happened in the Overhead cost in Jan. But when we combine the two statements we can find the change in values in terms of the old values easily.

Hence, both the statements are necessary. Please correct me if I am wrong

Re: The total cost of producing item X is equal to the sum of it [#permalink]
21 Jun 2014, 02:46

VeritasPrepKarishma wrote:

GMATD11 wrote:

The total cost of producing item X is equal to the sum of item X's overhead cost and production cost. If the production cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in that same month?

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

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

Guys i marked B but its wrong.

Pls discuss

The reason 'B' is not the answer is that you are not allowed to 'assume' anything in DS questions. You know that production cost increased by 5%. Using statement 2, you also see that production cost is a sixth of the total cost. So you assume that you know the change in the total cost. But remember, you are assuming here that overhead cost hasn't changed. Since you do not know whether overhead cost is the same or has changed, you cannot say anything about the decrease/increase in the overall cost. Even if you overlooked this, statement 1 should have reminded you that overhead cost could have changed too. Hence the answer has to be (c).

Hi Karishma, Can you please explain why A can't be the answer.

According to me, Total cost = OC + PC ------A

Using 1st stat , TC = 1.13 OC + .95 PC ------- B

We can now just substitute some value for OC and PC in A then modify the values to percent in B Then using A and B we can find the percent change since they are not asking the actual cost.

Re: The total cost of producing item X is equal to the sum of it [#permalink]
22 Jun 2014, 20:12

1

This post received KUDOS

Expert's post

gauravsoni wrote:

VeritasPrepKarishma wrote:

GMATD11 wrote:

The total cost of producing item X is equal to the sum of item X's overhead cost and production cost. If the production cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in that same month?

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

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

Guys i marked B but its wrong.

Pls discuss

The reason 'B' is not the answer is that you are not allowed to 'assume' anything in DS questions. You know that production cost increased by 5%. Using statement 2, you also see that production cost is a sixth of the total cost. So you assume that you know the change in the total cost. But remember, you are assuming here that overhead cost hasn't changed. Since you do not know whether overhead cost is the same or has changed, you cannot say anything about the decrease/increase in the overall cost. Even if you overlooked this, statement 1 should have reminded you that overhead cost could have changed too. Hence the answer has to be (c).

Hi Karishma, Can you please explain why A can't be the answer.

According to me, Total cost = OC + PC ------A

Using 1st stat , TC = 1.13 OC + .95 PC ------- B

We can now just substitute some value for OC and PC in A then modify the values to percent in B Then using A and B we can find the percent change since they are not asking the actual cost.

Ok, let's continue and find the percent change in total cost.

TC = OC + PC

We don't know how much of total cost is OC and how much is PC. Let's assume that total cost is 200 and OC = 100, PC = 100

New TC = 1.13 OC + .95 PC New TC = 1.13*100 + .95*100 = 208 This is a 4% increase.

Now let's assume that of the total cost of 200, OC = 50, PC = 150

New TC = 1.13*50 + .95*150 = 199 This is a 0.5% decrease.

Note that the % change in total cost is dependent on how the total cost is divided between OC and PC. Since statement 1 alone doesn't tell us how it is divided, we don't know whether there is an increase/decrease in total cost and how much. _________________

Re: The total cost of producing item X is equal to the sum of it [#permalink]
12 Jul 2015, 07:18

Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email. _________________

Low GPA MBA Acceptance Rate Analysis Many applicants worry about applying to business school if they have a low GPA. I analyzed the low GPA MBA acceptance rate at...

http://blog.davidbbaker.com/wp-content/uploads/2015/11/12249800_10153820891439090_8007573611012789132_n.jpg When you think about an MBA program, usually the last thing you think of is professional collegiate sport. (Yes American’s I’m going...