GMAT Question of the Day: Daily via email | Daily via Instagram New to GMAT Club? Watch this Video

 It is currently 22 Feb 2020, 20:54

### 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

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

# A company's two division performed with remarkable consistency over th

Author Message
TAGS:

### Hide Tags

Manager
Joined: 02 Sep 2006
Posts: 198
A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

15 Feb 2007, 20:19
5
38
00:00

Difficulty:

25% (medium)

Question Stats:

77% (01:39) correct 23% (01:56) wrong based on 1475 sessions

### HideShow timer Statistics

A company's two division performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollars sales and 40 percent of profits, and the chemicals division for the balance.

Regarding the past three years, which of the following can properly be inferred from the statement above?

(A) Total dollars sales for each of the company's divisions have remained roughly constant.

(B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.

(C) The chemical division has realized lower profits per dollars of sales than has the pharmaceuticals division.

(D) The product mix offered by each of the company's divisions has remained unchanged.

(E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of the pharmaceuticals division's.
VP
Joined: 08 Nov 2006
Posts: 1448
Location: Ann Arbor
Schools: Ross '10
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

15 Feb 2007, 20:33
15
1
faifai0714 wrote:
A company's two division performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollars sales and 40 percent of profits, and the chemicals division for the balance.

Regarding the past three years, which of the following can properly be inferred from the statement above?

A) Total dollars sales for each of the company's divisions have remianed roughly constant.

B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.

C)The chemical division has realized lower profits per dollars of sales than has the pharmaceuticals division.

D)The product mix offered by each of the company's divisions has remained unchanged.

E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of the pharmaceuticals division's.

It is very helpful to pick numbers for such questions.

Assume Total sales=500 and Total profits=100

Sales of pharmaceutical division=0.20*500=100
Profits from pharmaceutical division=40
Profits per dollar of sale=40/100=0.4

Sales of chemical division=0.80*500=400
Profits from chemical division=60
Profits per dollar of sale=60/400=0.15

0.15<0.40

From this, we can conclude that C is true.
##### General Discussion
Manager
Joined: 09 Jan 2007
Posts: 176
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

17 Feb 2007, 10:18
3
It's 'C'

For ex. let's assume total sale is 100 and total profit is 30%, which is 30.

Pharma.: Total sale 20%, which is 20 , profit is 12 (40% of 30). Profit margin is: 100*12/20 = 60%

Chem.: Total sale 80%, which is 80, profit is 18 (60% of 30). Profit margin is: 100*18/80 = 22.5%

Therefore, Chem dept. has lower profit margin than Pharma.
Manager
Joined: 15 Apr 2010
Posts: 127
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

27 Sep 2010, 20:33
4
2
a) Total dollar sales for each of the company’s divisions have remained roughly constant.
We do not know the the total dollar sales for the divisions. Wrong answer.

b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
The statement says nothing about competition in the markets.

d) The product mix offered by each of the company’s divisions has remained unchanged.
It doesn't matter if the product mix offered by each of the company’s divisions remained the same or not.

c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
The pharmaceuticals division has accounted for 20% of the total dollar sales and 40% of the profits while the chemicals division has accounted for 80% of the total dollar sales and 60% of the profits. So we can infer that the pharma division made more profits per dollar of sales than the chemicals division did.

e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.
If the chemicals division's products were highly profitable compared to those of the pharma division, then the chemicals division should have made much more profits on the total dollar sales than the pharma division. However, this was not the case.

I go for C.
Intern
Joined: 21 Sep 2010
Posts: 4
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

27 Sep 2010, 22:52
suyashjhawar wrote:
A company’s two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar ales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

a) Total dollar sales for each of the company’s divisions have remained roughly constant.
b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
d) The product mix offered by each of the company’s divisions has remained unchanged.
e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.

Think before you go for the answer

I think it should be A because the the entire percentages are based on total dollar sales value, if they remain constant

A is the one I go for. It is the sole assumption on which the statements are based. For a period of three years and key word "each of those years"

rest all go out of the way.

D was an option here but somehow it looked vague to me here. A is the only option which atleast qualifies.

Senior Manager
Status: Upset about the verbal score - SC, CR and RC are going to be my friend
Joined: 30 Jun 2010
Posts: 275
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

28 Sep 2010, 05:57
1
C

A is not the right choice. The question is talking about 20% and 80% total sales between the two divisions.
Current Student
Joined: 31 Mar 2010
Posts: 165
Schools: Tuck Class of 2013
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

28 Sep 2010, 07:13
3
suyashjhawar wrote:
A company’s two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar ales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

a) Total dollar sales for each of the company’s divisions have remained roughly constant.
b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
d) The product mix offered by each of the company’s divisions has remained unchanged.
e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.

Think before you go for the answer

If "S" is sales and "P" is profit:
$$Pharma = 0.4*P/0.2*S = 2P/S$$
$$Chemic = 0.6*P/0.8*S = 3P/4S$$

Thus, the chemical division realizes a lower profit per sales than that of the Pharma. C.
Senior Manager
Joined: 13 Aug 2009
Posts: 498
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

28 Sep 2010, 07:23
3
This seems like such a math question. I read through all of the answer choices and read E. I thought E was the right answer but it seemed to easy then looked back at C. C is the answer for sure. Pharma: 20% of "ales" but makes up 40% of profits.
_________________
It's a dawg eat dawg world.
Intern
Joined: 21 Sep 2010
Posts: 4
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

28 Sep 2010, 08:02
MBAUncle wrote:
suyashjhawar wrote:
A company’s two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar ales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

a) Total dollar sales for each of the company’s divisions have remained roughly constant.
b) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.
c) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.
d) The product mix offered by each of the company’s divisions has remained unchanged.
e) Highly profitable products accounted for a higher percentage of the chemicals division’s sales than of those of the pharmaceuticals divisions.

Think before you go for the answer

If "S" is sales and "P" is profit:
$$Pharma = 0.4*P/0.2*S = 2P/S$$
$$Chemic = 0.6*P/0.8*S = 3P/4S$$

Thus, the chemical division realizes a lower profit per sales than that of the Pharma. C.

Guys you cannot make those calculations unless the total sales value is constant. We dont know the changes which happened in share out of the total value across all years.
Senior Manager
Joined: 13 Aug 2009
Posts: 498
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

28 Sep 2010, 08:39
sauravdas wrote:
Guys you cannot make those calculations unless the total sales value is constant. We dont know the changes which happened in share out of the total value across all years.

A company’s two divisions performed with remarkable consistency over the past three years.
_________________
It's a dawg eat dawg world.
Senior Manager
Joined: 18 Feb 2008
Posts: 363
Location: Kolkata
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

28 Sep 2010, 09:17
OA is C friends.Rightly pointed by many.

Pharmaceuticals division made 40% profit on only 20 % of sales while chemicals division making up the balance made 60% of profits on 80% of sales. Thus chemicals division made a lower profit per dollar of sale than the pharmaceuticals division, hence Choice C.
No info about total dollar sales, so A incorrect nor about the severity of competition so B incorrect. No info is provided about the mix of products nor about the breakdown between highly profitable and not highly profitable products. So neither D nor E.
Intern
Joined: 23 Apr 2009
Posts: 46
Location: Texas
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

28 Sep 2010, 13:42
Hard to understand the question. Are there words missing or something? "dollar ales" and "and the chemicals division for the balance"??? Maybe I can't think straight anymore and need to take a break...

Anyway, I think it is C.
Director
Joined: 29 Nov 2012
Posts: 677
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

07 Aug 2013, 05:47
Always good to have a numerical example for such questions!
Manager
Joined: 20 Jul 2013
Posts: 51
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

26 Jan 2015, 15:32
fozzzy wrote:
Always good to have a numerical example for such questions!

True! Especially, when it's a little unclear to see the logic behind the statements.

Honestly, I really feel that trying to use more logic rather than pure calculations can save you a bunch of seconds --- that can be tacked onto to later questions.

Here, we're given that the P division accounted for 20% of dollar sales, yet made up 40% of profits for the company.

Clearly, once focused into the dollar sales and profits relationship, P has clearly generated highers profits per dollar sales than C has.

I think seeing that relationship right off the bat is something that most people miss, because they don't usually feel that they'll need to see this in order to solve the question ... that is, until they reach the answer choices.

A lot of these numbers and percentages problems can be solved using logic, rather than pure calculations.

Ron Purewal has a great video posted on this topic, and it's really a powerful method to develop for time saving skills. Sure, it takes some getting used to; but, boy does it save you time!
Manager
Joined: 07 Mar 2016
Posts: 60
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

25 Jul 2016, 21:36
Can some one explain me the meaning of "chemicals division for the balance"
Retired Moderator
Joined: 14 Dec 2013
Posts: 2838
Location: Germany
Schools: German MBA
GMAT 1: 780 Q50 V47
WE: Corporate Finance (Pharmaceuticals and Biotech)
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

26 Jul 2016, 16:11
1
1
ashutoshsh wrote:
Can some one explain me the meaning of "chemicals division for the balance"

This means:

The chemicals division (accounted for) for the balance (sales and profits).
In other words, the chemicals division accounted for 80% of sales and 60% of profit.
Director
Joined: 26 Oct 2016
Posts: 597
Location: United States
Schools: HBS '19
GMAT 1: 770 Q51 V44
GPA: 4
WE: Education (Education)
Re: A company's two division performed with remarkable consistency over th  [#permalink]

### Show Tags

26 Apr 2017, 22:54
Pharmaceuticals division has accounted for roughly 20 percent of dollar sales and 40 percent of profits, and the chemicals division for the balance. The chemical division, therefore, accounted for 80% of the sales and 60% of the profits.

Pharma -> 20% sales, 40% profits
Chemical -> 80% sales, 60% profits

Pharma -> 20% sales, 40% profits
Chemical -> 80% sales, 60% profits

Lets say the revenue was $200 and profits were$100 (I would LOVE to have that kind of profit margin in real life!)

So, Pharma has $40 (20% of$200) in sales and $40 in profit (40% of$100)
Chemical has $160 (80% of 200) in revenue and$60(60% of $100) in profit. Profit per dollar for Pharma =$40/$40 = 1 which is > than$60/$160 for Chemical. Clearly, chemical division realized lower profits per dollar of sales than the pharma division as stated by C. _________________ Thanks & Regards, Anaira Mitch Intern Joined: 12 Mar 2017 Posts: 39 Re: A company's two division performed with remarkable consistency over th [#permalink] ### Show Tags 25 Jul 2017, 23:56 A company's two division performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollars sales and 40 percent of profits, and the chemicals division for the balance. Regarding the past three years, which of the following can properly be inferred from the statement above? A) Total dollars sales for each of the company's divisions have remianed roughly constant. Though the word remarkable consistency and roughly constant look synonymous but without actual number we cannot state this as conclusion for three years. B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division. We can state this. Competition to another person might be in terms of production or other factors and not sales. C)The chemical division has realized lower profits per dollars of sales than has the pharmaceuticals division. So if there is 100$ sales and 50$prodit. So Pharma had 20$ sales and $8 profit. So 8/20 is the profit per dollar. Chemical has$80 sale $30 profit, so 30/80 which is lower. D)The product mix offered by each of the company's divisions has remained unchanged. Out of scope E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of the pharmaceuticals division's. We do not know about the products. Senior Manager Joined: 17 Jan 2017 Posts: 294 Location: India GPA: 4 WE: Information Technology (Computer Software) Re: A company's two divisions performed with remarkable consistency [#permalink] ### Show Tags 16 Sep 2018, 17:50 billionaire wrote: A company's two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar sales and 40 percent of profits, and the chemicals division for the balance. Which of the following can properly be inferred regarding the past three years from the statement above? (A) Total dollar sales for each of the company's divisions have remained roughly constant. (B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division. (C) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division. (D) The product mix offered by each of the company's divisions has remained unchanged (E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of those of the pharmaceuticals division. +1 for C (A) Total dollar sales for each of the company's divisions have remained roughly constant. - Incorrect. This cannot be inferred as we are given percentages and not numbers. Hence, total dollar sales cannot be determined to say whether they were constant. (B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division. - Incorrect. This is no where mentioned in the stimulus. Out of scope (C) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division. - Correct. This can be inferred. Lets say the total sales the company made is of 100$ and Profit is 50$Pharmaceuticals Div - Sales = 20$ and Profit = 20$. The ratio would be 1:1 Chemicals div - (Remaining balance) Sales = 80$ and Profit = 30\$. The ratio would be less than 1:1. Hence, option C can be inferred.

(D) The product mix offered by each of the company's divisions has remained unchanged
- Incorrect. Product mix is out of scope

(E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of those of the pharmaceuticals division.
-Incorrect. Stimulus doesn't talk about highly profitable products or any other specific products. Out of scope
_________________
Only those who risk going too far, can possibly find out how far one can go
Senior Manager
Joined: 07 Dec 2017
Posts: 318
GMAT 1: 650 Q50 V28
GMAT 2: 720 Q49 V40
Re: A company's two divisions performed with remarkable consistency  [#permalink]

### Show Tags

16 Sep 2018, 18:27
billionaire wrote:
A company's two divisions performed with remarkable consistency over the past three years: in each of those years, the pharmaceuticals division has accounted for roughly 20 percent of dollar sales and 40 percent of profits, and the chemicals division for the balance.

Which of the following can properly be inferred regarding the past three years from the statement above?

(A) Total dollar sales for each of the company's divisions have remained roughly constant.

(B) The pharmaceuticals division has faced stiffer competition in its markets than has the chemicals division.

(C) The chemicals division has realized lower profits per dollar of sales than has the pharmaceuticals division.

(D) The product mix offered by each of the company's divisions has remained unchanged

(E) Highly profitable products accounted for a higher percentage of the chemicals division's sales than of those of the pharmaceuticals division.

+1 for C

A: We don't have any data about other division sales: Insufficient information

B: Again Insufficient information

C: This we can infer that even if we take the case when there are only two division than Pharma DIV Profit/ sales: 40/20--> 2/1 and Chemical DIV Profit/ sales: ~-> 1/1 as we are told

D: Out of scope

E: Out of scope
Re: A company's two divisions performed with remarkable consistency   [#permalink] 16 Sep 2018, 18:27

Go to page    1   2    Next  [ 23 posts ]

Display posts from previous: Sort by