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Which of Company X and Company Y earned the greater gross [#permalink]
23 Jul 2012, 05:09

1

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00:00

A

B

C

D

E

Difficulty:

15% (low)

Question Stats:

74% (01:51) correct
26% (00:37) wrong based on 126 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.

Re: Which of Company X and Company Y earned the greater gross [#permalink]
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 _________________

Re: Which of Company X and Company Y earned the greater gross [#permalink]
23 Jul 2012, 07:12

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Expert's post

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.

Re: Which of Company X and Company Y earned the greater gross [#permalink]
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) _________________

" Make more efforts " Press Kudos if you liked my post

Re: Which of Company X and Company Y earned the greater gross [#permalink]
18 Apr 2014, 02:11

Hello from the GMAT Club BumpBot!

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Re: Which of Company X and Company Y earned the greater gross [#permalink]
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

Re: Which of Company X and Company Y earned the greater gross [#permalink]
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

gmatclubot

Re: Which of Company X and Company Y earned the greater gross
[#permalink]
12 Sep 2014, 22:45