it is E according to me.. lemme try and explain.
let x and y be the average height of the classes X and Y respectively.
from statement 1--- x=120, y not known, hence insufficient.
from statement 2---- x+y=126, which is insufficient too..
now combining both, we get
SINCE the AVERAGE height of Classes X and Y combines is 126, total height is 126*2= 252 right? (for eg, there are two numbers 2 and 4. their average is 3. so 3*2=6 which is the SUM of the two numbers).
now we CANNOT subtract 120 from 252, because 252 is NOT the average anymore, but the TOTAL HEIGHT. and 120 is the average. So they cannot be subtracted.
Hence, I go with E.
Let's get it right!!!!