It is currently 20 Nov 2017, 12:42

Close

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
Your Progress

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

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

A construction company was paid a total of $500,000 for a

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

4 KUDOS received
Intern
Intern
avatar
Joined: 03 Jun 2010
Posts: 16

Kudos [?]: 32 [4], given: 0

A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

New post 22 Jul 2010, 11:55
4
This post received
KUDOS
28
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  75% (hard)

Question Stats:

59% (01:06) correct 41% (01:02) wrong based on 510 sessions

HideShow timer Statistics

A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?

(1) The company's total cost was three times its cost for materials.

(2) The company's profit was greater than its cost for labor
[Reveal] Spoiler: OA

Kudos [?]: 32 [4], given: 0

Expert Post
11 KUDOS received
Math Expert
User avatar
V
Joined: 02 Sep 2009
Posts: 42269

Kudos [?]: 132811 [11], given: 12378

Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 22 Jul 2010, 12:04
11
This post received
KUDOS
Expert's post
22
This post was
BOOKMARKED
asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?

(1) The company's total cost was three times its cost for materials.

(2) The company's profit was greater than its cost for labor


Given: \(c=l+m\)
Question is \(p=500-c>150\) true?

(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.

(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.

(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.

Answer: C.
_________________

New to the Math Forum?
Please read this: Ultimate GMAT Quantitative Megathread | All You Need for Quant | PLEASE READ AND FOLLOW: 12 Rules for Posting!!!

Resources:
GMAT Math Book | Triangles | Polygons | Coordinate Geometry | Factorials | Circles | Number Theory | Remainders; 8. Overlapping Sets | PDF of Math Book; 10. Remainders | GMAT Prep Software Analysis | SEVEN SAMURAI OF 2012 (BEST DISCUSSIONS) | Tricky questions from previous years.

Collection of Questions:
PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat

DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.


What are GMAT Club Tests?
Extra-hard Quant Tests with Brilliant Analytics

Kudos [?]: 132811 [11], given: 12378

1 KUDOS received
Intern
Intern
avatar
Joined: 03 Jun 2010
Posts: 16

Kudos [?]: 32 [1], given: 0

Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 22 Jul 2010, 12:05
1
This post received
KUDOS
Cost(C) = Labor(L) + Materials(M)
Profit(P) = 500,000-C
is 500,000 - C > 150,000?
is C < 350,000

(1) C = 3M
C = 3M = L + M, L = 2M

(2) P > L
Substitute 2M for L
P > 2M
multiply both sides by 3/2
(3/2)P > 3M
Substitute C for 3M
(3/2)P > C
plug 150,000 in for P
(3/2)(150,000) > C
225,000 > C

So, C < 350,000 and the answer is yes, so then (1) and (2) together are sufficient

Kudos [?]: 32 [1], given: 0

Intern
Intern
avatar
Joined: 03 Jun 2010
Posts: 16

Kudos [?]: 32 [0], given: 0

Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 22 Jul 2010, 12:05
1
This post was
BOOKMARKED
Bunuel wrote:
asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?

(1) The company's total cost was three times its cost for materials.

(2) The company's profit was greater than its cost for labor


Given: \(c=l+m\)
Question is \(p=500-c>150\) true?

(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.

(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.

(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.

Answer: C.


wow, that was fast, I was just typing my explanation, but yours looks much simpler. thanks

Kudos [?]: 32 [0], given: 0

2 KUDOS received
Intern
Intern
User avatar
Joined: 16 Jul 2010
Posts: 18

Kudos [?]: 21 [2], given: 9

Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 22 Jul 2010, 12:53
2
This post received
KUDOS
My solution:

1) Total cost = 3M, Labor = 2M, NS

2) Profit >= Labor, NS

1) and 2) Profit >= 2M, therefore profit must be at least 2M/(2M+M+2M)*$500,000 = 2/5*$500,000, therefore profit >= $200,000. Sufficient.
_________________

If you find my posts useful, please award me some Kudos!

Kudos [?]: 21 [2], given: 9

Intern
Intern
avatar
Joined: 03 Jun 2010
Posts: 16

Kudos [?]: 32 [0], given: 0

Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 23 Jul 2010, 06:28
dauntingmcgee wrote:
My solution:

1) Total cost = 3M, Labor = 2M, NS

2) Profit >= Labor, NS

1) and 2) Profit >= 2M, therefore profit must be at least 2M/(2M+M+2M)*$500,000 = 2/5*$500,000, therefore profit >= $200,000. Sufficient.


Could you please explain why profit must be at least 2M/(2M+M+2M)*500,000?

Kudos [?]: 32 [0], given: 0

1 KUDOS received
Intern
Intern
User avatar
Joined: 16 Jul 2010
Posts: 18

Kudos [?]: 21 [1], given: 9

Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 23 Jul 2010, 06:57
1
This post received
KUDOS
Gladly.

Since from:

1) we know that Labor (L) = 2 * Materials (M), and
2) we know that Profit (P) >= L
1) and 2) combined show that P >= 2M

There are only three components of the $500,000: P, L and M, so P+L+M = $500,000. The minimum amount of P is the case that P = L = 2M. In order to find what fraction P is of P+L+M we simply take \(P/(P+M+L) = 2M/(2M+M+2M) = 2M/5M = 2/5\). Now that we know what fraction of the $500,000 is P, we simply multiply 2/5 * $500,000 to get $200,000. Sufficient.
_________________

If you find my posts useful, please award me some Kudos!

Kudos [?]: 21 [1], given: 9

Math Forum Moderator
avatar
Joined: 20 Dec 2010
Posts: 1965

Kudos [?]: 2094 [0], given: 376

Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 19 Feb 2011, 14:59
1
This post was
BOOKMARKED
Total budget = 500

Is profit > 150

Or is expenditure < 350

1) Total cost = Material+Labor
T = M+L
T = 3M
3M = M+L
2M = L

Labor cost is twice that of material.

If M=1, L=2; T=3. Expenditure < 350. Yes
M=150; L=300; T=450; Expenditure > 350. No.
Not sufficient.

2) Company's Profit P>L
M=0; L=249; P=251. Expenditure <350. Yes
M=399; L=1; P=100. Expenditure <350. No.
Not sufficient.

Combining 1 and 2;
T=M+L=L/2+L
T=(3/2)L
P=500-T=500-(3/2)L
P=500-(3/2)L
P>L
500-(3/2)L>L
500>(5/2)L
(5/2)L<500
L<200
Since M is half L. M should be <100
Even if we consider maximum of these;
Total maximum expenditure = 200+100=300<350.
Thus profit will always be >150.

Ans: "C"
_________________

~fluke

GMAT Club Premium Membership - big benefits and savings

Kudos [?]: 2094 [0], given: 376

Expert Post
3 KUDOS received
Veritas Prep GMAT Instructor
User avatar
G
Joined: 16 Oct 2010
Posts: 7738

Kudos [?]: 17817 [3], given: 235

Location: Pune, India
Re: Cost/Profit Problem - is my explanation correct? [#permalink]

Show Tags

New post 19 Feb 2011, 20:27
3
This post received
KUDOS
Expert's post
2
This post was
BOOKMARKED
fluke wrote:
Total budget = 500

Is profit > 150

Or is expenditure < 350

1) Total cost = Material+Labor
T = M+L
T = 3M
3M = M+L
2M = L

Labor cost is twice that of material.

If M=1, L=2; T=3. Expenditure < 350. Yes
M=150; L=300; T=450;


Actually, you may not want to use so many variables and then plug values. Chances of error are very high in this case. Preferably, stick to algebra or reason it out as follows:

>>> A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials.

500,000 is divided into 3 parts - Labor costs, material costs and profit.

>>> Was the company's profit greater than $150,000?

Was profit > 150,000?

>>> (1) The company's total cost was three times its cost for materials.

labor cost + material cost = 3 * material cost
labor cost = 2* material cost

So now we know that 500,000 is divided into 3 parts - 2*material costs (labor), material costs and profit.
But no idea what these costs and profit are. Not sufficient.

>>> (2) The company's profit was greater than its cost for labor
Profit > labor cost but no idea how much labor cost or material cost was. Not sufficient.

Together, Profit > 2 material cost so even if it was greater than 2*material cost by a very very small amount, 500,000 would have been split into 3 parts: 2*material cost (labor), material cost and 2*material cost (profit)
So 2*material cost would be at least 200,000. Hence profit is at least 200,000. Sufficient.
Answer (C).
_________________

Karishma
Veritas Prep | GMAT Instructor
My Blog

Get started with Veritas Prep GMAT On Demand for $199

Veritas Prep Reviews

Kudos [?]: 17817 [3], given: 235

1 KUDOS received
Intern
Intern
avatar
Joined: 22 Nov 2011
Posts: 8

Kudos [?]: 7 [1], given: 1

Location: United States
Schools: Carroll '15
GMAT Date: 01-12-2012
GPA: 3.17
WE: Sales (Investment Banking)
Re: GMATprep DS1 [#permalink]

Show Tags

New post 27 Dec 2011, 14:07
1
This post received
KUDOS
when you combine
TC (total cost)= 3m (material)
TC= L (labor) + m = 3m so L=2M

500-TC>2m (aka L)
500>5m
m<100

500 - less then 300= greater then 200k

C

Kudos [?]: 7 [1], given: 1

1 KUDOS received
Manager
Manager
User avatar
Joined: 29 Jul 2011
Posts: 104

Kudos [?]: 73 [1], given: 6

Location: United States
Re: GMATprep DS1 [#permalink]

Show Tags

New post 10 Jan 2012, 15:01
1
This post received
KUDOS
Rephrase: 500K - [L+M] >= 150K
L+M <= 350K?

1. L+M = 3M => L = 2M. No info on M or L values, insuff.
2. L < 150K. M=? insuff

Together, L<150K, which means M<75K, which implies that the labor cost is 3M<3x75K=225K. Obviously, this means that profit > 150K. Suff.
_________________

I am the master of my fate. I am the captain of my soul.
Please consider giving +1 Kudos if deserved!

DS - If negative answer only, still sufficient. No need to find exact solution.
PS - Always look at the answers first
CR - Read the question stem first, hunt for conclusion
SC - Meaning first, Grammar second
RC - Mentally connect paragraphs as you proceed. Short = 2min, Long = 3-4 min

Kudos [?]: 73 [1], given: 6

Manager
Manager
avatar
B
Joined: 26 May 2013
Posts: 98

Kudos [?]: 31 [0], given: 30

Premium Member
Re: A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

New post 23 Feb 2014, 23:50
Hi all. Bumping this topic because I didn't find an adequate answer explanation.

Here's mine:

Given :

Profit = 500,000 - TC

TC = L + M

St. 1: (N.S.)

TC = 3M
3M = L + M
2M = L

St. 2: (N.S.)

P > L , since L = 2M , Profit > 2M

Both Statements:

P = 500,000 - 3M [TC = 3M from st. 1]
2M = 500,000 - 3M [P > L , P > 2M ] . Substitute 2M into the profit formula, knowing that the Profit number must be greater than 2M.

solve for M: ... M = $100,000. Plug into profit formula :

2($100,000) = $500,000 - 3($100,000)

Profit > $200,000

Answer choice C.

Kudos [?]: 31 [0], given: 30

VP
VP
avatar
P
Joined: 26 Mar 2013
Posts: 1284

Kudos [?]: 296 [0], given: 165

Reviews Badge CAT Tests
A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

New post 04 Jun 2015, 04:39
Bunuel wrote:
asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?

(1) The company's total cost was three times its cost for materials.

(2) The company's profit was greater than its cost for labor


Given: \(c=l+m\)
Question is \(p=500-c>150\) true?

(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.

(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.

(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.

Answer: C.


Hi Bunuel,
In Statement 1 we concluded that m< 350/3= 116.66 So we can substitute the result in the equation 500-(3*116)=152>150. We can choose number lower than 116. Choose 115 and apply in the equation 500-(3*115)=155 > 150 any number lower than 350/3 will result in P>150. So Statement A should be Sufficient.

What is wrong in my work?

Kudos [?]: 296 [0], given: 165

Expert Post
Math Expert
User avatar
V
Joined: 02 Sep 2009
Posts: 42269

Kudos [?]: 132811 [0], given: 12378

Re: A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

New post 04 Jun 2015, 04:46
Mo2men wrote:
Bunuel wrote:
asch13 wrote:
A construction company was paid a total of $500,000 for a construction project. The company's only costs for the project were for labor and materials. Was the company's profit greater than $150,000?

(1) The company's total cost was three times its cost for materials.

(2) The company's profit was greater than its cost for labor


Given: \(c=l+m\)
Question is \(p=500-c>150\) true?

(1) \(c=3m\) --> is \(500-3m>150\) true? --> is \(m<\frac{350}{3}\approx{117}\) true? Not sufficient.

(2) \(500-(l+m)>l\) --> \(500>2l+m\). Not sufficient.

(1)+(2) Question became is \(m<\frac{350}{3}\approx{117}\) true? From (1) \(c=l+m=3m\) --> \(l=2m\). From (2) \(500>2l+m=4m+m=5m\) --> \(m<100\). Sufficient.

Answer: C.


Hi Bunuel,
In Statement 1 we concluded that m< 350/3= 116.66 So we can substitute the result in the equation 500-(3*116)=152>150. We can choose number lower than 116. Choose 115 and apply in the equation 500-(3*115)=155 > 150 any number lower than 350/3 will result in P>150. So Statement A should be Sufficient.

What is wrong in my work?


From (1) we don't know whether m<117. The question becomes "IS m<117".
_________________

New to the Math Forum?
Please read this: Ultimate GMAT Quantitative Megathread | All You Need for Quant | PLEASE READ AND FOLLOW: 12 Rules for Posting!!!

Resources:
GMAT Math Book | Triangles | Polygons | Coordinate Geometry | Factorials | Circles | Number Theory | Remainders; 8. Overlapping Sets | PDF of Math Book; 10. Remainders | GMAT Prep Software Analysis | SEVEN SAMURAI OF 2012 (BEST DISCUSSIONS) | Tricky questions from previous years.

Collection of Questions:
PS: 1. Tough and Tricky questions; 2. Hard questions; 3. Hard questions part 2; 4. Standard deviation; 5. Tough Problem Solving Questions With Solutions; 6. Probability and Combinations Questions With Solutions; 7 Tough and tricky exponents and roots questions; 8 12 Easy Pieces (or not?); 9 Bakers' Dozen; 10 Algebra set. ,11 Mixed Questions, 12 Fresh Meat

DS: 1. DS tough questions; 2. DS tough questions part 2; 3. DS tough questions part 3; 4. DS Standard deviation; 5. Inequalities; 6. 700+ GMAT Data Sufficiency Questions With Explanations; 7 Tough and tricky exponents and roots questions; 8 The Discreet Charm of the DS; 9 Devil's Dozen!!!; 10 Number Properties set., 11 New DS set.


What are GMAT Club Tests?
Extra-hard Quant Tests with Brilliant Analytics

Kudos [?]: 132811 [0], given: 12378

Intern
Intern
avatar
Joined: 17 May 2016
Posts: 8

Kudos [?]: 1 [0], given: 0

A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

New post 18 Jun 2016, 17:23
Hi all. I’m not very good at mathy explanations (more of a verbal guy), but I got this question right first time in about 2 minutes. Here is my logic to it:

The question stem tells us that the company was paid $500k for the project, and states that only labor and material are the costs. It then asks if the company’s profit is greater than 150k. Another way of thinking of that is asking if the costs were greater than $350k. (Since $500k payment – $350k cost = $150k profit)

Statement 1 tells us that the ratio of total cost to cost of material is 3 to 1. Because the question stem states the only other cost is labor, we know that the ratio of labor cost to material cost is 2:1. For every dollar of material there is 2 dollars of labor. Not sufficient on its own.

Statement 2 tells us the company profit is greater than its cost of labor. An important part of that is that it means profit is indeed a positive number! Not sufficient on its own.

With the statements combined we know that profit is greater than labor, and the ratio of labor to material is 2:1.
The limit ends up being $200k profit, $200k labor, and $100k materials. The company’s actual costs have to be lower than this limit. Even the limit only has $300k of cost, which is much lower than $350k as asked in the question stem.

Answer is C.

Kudos [?]: 1 [0], given: 0

Intern
Intern
avatar
Joined: 26 May 2014
Posts: 43

Kudos [?]: 60 [0], given: 17

Location: India
Concentration: General Management, Technology
WE: Information Technology (Computer Software)
A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

New post 26 Oct 2016, 11:20
Converting the question into equations is the key to solving this question under two mins.

What does the question stem say -> Cost (C) = Labour ( L ) + Material ( M )

Cost = 500 ( dividing by 1000, makes the calculations appear less daunting )

Is Profit > 150 ?

What is profit ? -> Money Earned - Money Spent

Money Earned is -> 500

So Profit ( P) = 500 - C

Now, Rephrasing the question stem,
Is 500 - C > 150
which means, Is C < 350 ?

Now, lets look at both the options.

A) C=3M

No numerical given, so there is no way to ascertain the answer to our main question.

B) Profit is > Cost of Labour -- Which in mathematical terms, means the following

500 - C > L

now as we already know that C= L + M, L= C -M

Substituting,

500 -C > C - M ,

500 > 2C - M ( Again no numerical value available to prove C< 350 )

Now , Lets combine A and B

500 >2C - M and C= 3M,

Lets get everything in terms of C as our main question is in terms of C.

500 > 2C - C/3 ,

This gives us -- > C < 300 , which is sufficient to answer our main question , Is C< 350 .

Answer is C.

Kudos [?]: 60 [0], given: 17

Non-Human User
User avatar
Joined: 09 Sep 2013
Posts: 15617

Kudos [?]: 283 [0], given: 0

Premium Member
Re: A construction company was paid a total of $500,000 for a [#permalink]

Show Tags

New post 30 Oct 2017, 11:35
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________

GMAT Books | GMAT Club Tests | Best Prices on GMAT Courses | GMAT Mobile App | Math Resources | Verbal Resources

Kudos [?]: 283 [0], given: 0

Re: A construction company was paid a total of $500,000 for a   [#permalink] 30 Oct 2017, 11:35
Display posts from previous: Sort by

A construction company was paid a total of $500,000 for a

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.