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

It is currently 24 Jul 2014, 07:30

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

V03 #13

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
Intern
Intern
avatar
Joined: 03 Jul 2009
Posts: 9
Followers: 0

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

V03 #13 [#permalink] New post 29 May 2010, 12:02
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 cost of gas-burning grills has dropped nearly 40% in the last year, prompting an increase in sales. Hank’s Hardware responded to the popularity of gas grills with large displays and deeply-discounted sale prices. Sales of gas grills at Hank’s Hardware went up by a third, but at the end of the quarter managers were shocked to find they had lost money on gas grills.

Which of the following, if true, is the best explanation for why Hank’s Hardware’s profits on gas grills are suffering?

(a) Sales volume has been miscalculated, surprising managers with a loss in profits.
(b) The further discounts offered by sale prices account for a larger dollar amount than the increase in sales, leading to a loss of profits.
(c) The reduction in cost is caused by shoddy construction, which is why many people who purchased gas grills are returning them, leading to a loss in profits.
(d) Wood-burning grills are more popular than gas-grills; since Hank’s carries mostly gas grills, their profits are suffering
(e) Customers only bought gas grills when they were on sale; once the sale was over, they stopped buying the grills, leading to a loss in profits.

OA (b)
maybe i'm missing something here, but (b) can't explain why the store is losing money (there's a difference between losing money, as in the situation discribed in the pasage, and decreased profits, which (b) suggests)
the only answer that can explain loosing money is (c) but it's a bit lame

maybe "they had lost money on gas grills" should be rephrased to "their profits declined"?
CEO
CEO
avatar
Joined: 15 Aug 2003
Posts: 3470
Followers: 59

Kudos [?]: 657 [0], given: 781

Re: V03 #13 [#permalink] New post 06 Jun 2010, 11:43
hi,

I think your observation is mostly a nuance. Lost money on gas grills means loss in profits. What else would losing money mean?
Intern
Intern
avatar
Joined: 03 Jul 2009
Posts: 9
Followers: 0

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

Re: V03 #13 [#permalink] New post 06 Jun 2010, 12:13
right, right, right
too tired, sorry :oops:
Re: V03 #13   [#permalink] 06 Jun 2010, 12:13
    Similar topics Author Replies Last post
Similar
Topics:
GMATclub verbal test v03 dreamchase 0 24 Dec 2011, 11:04
V03#34 CR hussi9 1 19 Aug 2011, 23:19
V03#13 CR hussi9 2 19 Aug 2011, 23:03
V03#3 SC hussi9 1 19 Aug 2011, 22:04
1 V03 #29 ah64captain 9 29 May 2010, 12:49
Display posts from previous: Sort by

V03 #13

  Question banks Downloads My Bookmarks Reviews Important topics  

Moderators: Bunuel, WoundedTiger



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®.