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Which of Company X and Company Y earned the greater gross

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Which of Company X and Company Y earned the greater gross [#permalink] New post 23 Jul 2012, 05:09
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71% (01:48) correct 29% (00:46) wrong based on 166 sessions
Which of Company X and Company Y earned the greater gross profit last year?

(1) Last year the expenses of Company X were 5/6 of the expenses of Company Y.
(2) Last year the revenues of Company X were $6 million less than the revenues of Company Y.

Quote:
what i did.

statement I & II independently insufficient.

Taking together,

let Y expenses be 6m
X expenses= 5m

Let Y revenue= 12m
X revenue= 12-6=6m

y profit= exp*R= 6*12=72m
x profit= 5*6= 30 m

therefore, Y profit> X profit.

Both statement together suff.

Now my Q is why is it wrong?
[Reveal] Spoiler: OA

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Last edited by Bunuel on 23 Jul 2012, 06:26, edited 1 time in total.
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Re: Which of Company X and Company Y earned the greater gross [#permalink] New post 23 Jul 2012, 06:15
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Individually both are Not Sufficient. So solving for together

Profit X = Revenue X - Expense X

Expense X = 6/5 Expense Y
Revenue X = Revenue Y- 6

Hence Profit X = Revenue Y - 6 - 6/5 Expense Y
Now Profit Y = Revenue Y - Expense Y

Here if 6 + 6/5 Expense Y = Expense Y, than the statement is false as profit becomes equal, and its the case if Expense Y =36. For other examples the statement is true, ex. like the one you took. Hence insufficient and E
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Re: Which of Company X and Company Y earned the greater gross [#permalink] New post 23 Jul 2012, 07:12
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maybeam wrote:
Which of Company X and Company Y earned the greater gross profit last year?

(1) Last year the expenses of Company X were 5/6 of the expenses of Company Y.
(2) Last year the revenues of Company X were $6 million less than the revenues of Company Y.

Quote:
what i did.

statement I & II independently insufficient.

Taking together,

let Y expenses be 6m
X expenses= 5m

Let Y revenue= 12m
X revenue= 12-6=6m

y profit= exp*R= 6*12=72m
x profit= 5*6= 30 m


therefore, Y profit> X profit.

Both statement together suff.

Now my Q is why is it wrong?


Two reasons why your solution is wrong:
1. {Profit} = {Revenue} - {Expenses}, not {Profit} = {Revenue}*{Expenses}, as you've written.
2. One example is not enough to conclude that a statement is not sufficient.

Which of Company X and Company Y earned the greater gross profit last year?

Since {Profit} = {Revenue} - {Expenses}, then we are asked whether \(R_x-E_x>R_y-E_y\)?

(1) Last year the expenses of Company X were 5/6 of the expenses of Company Y --> \(E_x=\frac{5}{6}*E_y\). Not sufficient, as we know nothing about the revenues.

(2) Last year the revenues of Company X were $6 million less than the revenues of Company Y --> \(R_x=R_y-6,000,000\). Not sufficient, as we know nothing about the expenses.

(1)+(2) So, according to the above the question becomes whether \((R_y-6,000,000)-\frac{5}{6}*E_y>R_y-E_y\) or whether \(E_y>6*6,000,000\). We don't know that, hence even taken together the statements are not sufficient.

Answer: E.

Hope it's clear.
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Re: Which of Company X and Company Y earned the greater gross [#permalink] New post 26 Jul 2012, 05:30
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it's a DS ;Let's keep it simple
Revenue-Expenses=Profit
(i)expenses of x =5/6 of Y
WE STILL NEED REVENUE-insufficient
(ii)revenue of x= $6mn less than y
we don't know expenses-insufficient
from (i) and (ii)
both details are relative (to each other) not a standard figure, so (E)
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Re: Which of Company X and Company Y earned the greater gross [#permalink] New post 18 Apr 2014, 02:11
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Re: Which of Company X and Company Y earned the greater gross [#permalink] New post 10 May 2014, 11:01
From statement 1 and 2 , we have

P(x) = R(y) - 5/6*C(y) -6
P(y) = R(y) - C(y). At first sight it might seem for whatever value of C(y), P(y) would be greater. But for C(y) = 36, we get P(x)=P(y). Hence E is the answer
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Re: Which of Company X and Company Y earned the greater gross [#permalink] New post 12 Sep 2014, 22:45
Done with table method,
1 and 2 alone insufficient
On combining we know expenses of x is 5/6y if y is expenses.
And Y's revenue - 6 million
No data of y's revenue
So E
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Re: Which of Company X and Company Y earned the greater gross [#permalink] New post 08 Dec 2014, 15:03
Just want to provide a cautionary tale...

Had stmt 1 told us that expenses for r were equal to or greater than y, then both statements together would be sufficient. Seems simple enough, but if you get too concerned with trying to apply formulas, you really could waste a good amount of time.
Re: Which of Company X and Company Y earned the greater gross   [#permalink] 08 Dec 2014, 15:03
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