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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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A
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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.

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