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A local department store hires college students for one

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A local department store hires college students for one [#permalink]

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New post 19 May 2007, 06:39
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Question Stats:

75% (01:32) correct 25% (01:54) wrong based on 86 sessions

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A local department store hires college students for one month every spring to audit its unsold inventory. It costs the department store 20 percent less to pay wages to students than it would cost to hire outise auditors from a temporary service. Even after factoring the cost of training and insuring the students against work-related injury, the department store spends less money by hiring the student auditors than it would by hiring from the temporary service.

The statement above, if true, best support which of the following assertions?

A) The amount spent on insurance for college student auditor is more than 20 percent of the cost of paying the college student's basic wages.

B) It takes 20 percent less time for the college student to audit the unsold inventory than it does for the outside auditors.

C) The department store pays its college student auditors 20 percent less than the temporary service pays its auditors

D)By hiring college students, the department store will cause 20 percent of the auditors at the temporary service to lose their jobs.

E) The cost of traning its own college student auditors is less than 20 percent of the cost of hiring auditors from the temporary services.
[Reveal] Spoiler: OA

Last edited by abhimahna on 30 Sep 2016, 04:28, edited 1 time in total.
Edited the question and Added OA.

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 07:38
This question is from an easy quations bin. The answer is number 5 as all other answers are either irrelevant or not supported by the argument

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 07:39
10 views but no answers so far, can someone please explain the reasoning behind this?

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 07:43
i can see the answer now, it was easy, somehow got entangled in C befoe.

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 08:18
E

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 10:38
E sounds good to me.. C may not be the correct answer as it talks about wages only and doesn't talk about the cost to the store.

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 10:43
I dont get it, i think C is better! :oops:

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 10:48
OA and OE pls!

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 10:57
E is clear winner .
C is talking abt what "temporary service pays its auditors" which is irrelevant to the question asked.

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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 11:18
(E)
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Re: A local department store hires college students for one [#permalink]

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New post 19 May 2007, 22:52
Def. E. C is very tempting and I narrowed it down to C and E. But... If you notice C is already stated in the argument, thus it brings nothing new to the table.

E does so it must be E :)

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Re: A local department store hires college students for one [#permalink]

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New post 21 May 2007, 14:24
E.

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Re: A local department store hires college students for one [#permalink]

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New post 10 Oct 2013, 22:35
Between C and E. The problem with C is that although it pays students 20% less money it is not sure if it wud be a feasible option. What abt the cost of training and teh insurance that are aforementioned in the passage. Hence answer is E.

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Re: A local department store hires college students for one [#permalink]

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New post 24 Oct 2013, 04:06
I picked C because I thought that E is not necessarily true.

Example.)

1.) Cost of Temp Auditor=$100
2.) Cost of Student = $40
3.) Cost of Training = $30
4.) Cost of Insurance = $10

Total Cost of Student is $80 and Total cost of temp auditor is $100.

Now it is clear that training cost is $30 which is more than 20% of the cost of temp auditor. So in this case E is not true.

Although C is not the best answer but I eliminated E for the above reason and went for C because it was the best answer to me.

Can somebody help me with my reasoning and explain why E is the answer?

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Re: A local department store hires college students for one [#permalink]

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New post 24 Aug 2016, 18:38
Hello from the GMAT Club VerbalBot!

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Re: A local department store hires college students for one [#permalink]

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New post 29 Sep 2016, 06:11
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going with C

Only C talks about y hiring college students will cost less despite of proving training

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Re: A local department store hires college students for one [#permalink]

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New post 29 Sep 2016, 07:45
zion wrote:
A local department store hires college students for one month every spring to audit its unsold inventory. It costs the department store 20 percent less to pay wages to students than it would cost to hire outise auditors from a temporary service. Even after factoring the cost of training and insuring the students against work-related injury, the department store spends less money by hiring the student auditors than it would by hiring from the temporary service.

The statement above, if true, best support which of the following assertions?

1) The amount spent on insurance for college student auditor is more than 20 percent of the cost of paying the college student's basic wages.

2) It takes 20 percent less time for the college student to audit the unsold inventory than it does for the outside auditors.

3) The department store pays its college student auditors 20 percent less than the temporary service pays its auditors

4)By hiring college students, the department store will cause 20 percent of the auditors at the temporary service to lose their jobs.

5) The cost of traning its own college student auditors is less than 20 percent of the cost of hiring auditors from the temporary services.


E talks about training cost which could be high also. But C talks about holistic cost spent for students.

C
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Re: A local department store hires college students for one [#permalink]

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New post 29 Sep 2016, 13:03
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zion wrote:
A local department store hires college students for one month every spring to audit its unsold inventory. It costs the department store 20 percent less to pay wages to students than it would cost to hire outside auditors from a temporary service. Even after factoring the cost of training and insuring the students against work-related injury, the department store spends less money by hiring the student auditors than it would by hiring from the temporary service.

The statement above, if true, best support which of the following assertions?

1) The amount spent on insurance for college student auditor is more than 20 percent of the cost of paying the college student's basic wages.

2) It takes 20 percent less time for the college student to audit the unsold inventory than it does for the outside auditors.

3) The department store pays its college student auditors 20 percent less than the temporary service pays its auditors

4)By hiring college students, the department store will cause 20 percent of the auditors at the temporary service to lose their jobs.

5) The cost of training its own college student auditors is less than 20 percent of the cost of hiring auditors from the temporary services.


Good question , I really love this one

Cost of hiring outside auditors = 100
Cost of hiring college students auditors = 80

Other expenses = wages + training expenses +insurance
Other expenses = 80+ training expenses +insurance

Expenses for hiring college students auditors = college students auditors fees + Other expenses

Now , why option (E) -

Quote:
cost of training its own college student auditors is less than 20 percent of the cost of hiring auditors


It means ; Other expenses = 80+ ( training expenses +insurance )

( training expenses +insurance ) < 20 ( Ie. 20% of cost of hiring auditors )

This statement has to be true , if the cost of ( training expenses +insurance ) > 20 then the effective cost of hiring college students will be more than cost of hiring Auditors, hence will refute the original logic presented in the stimulus.

Hence IMHO (E) , errors in other options highlighted in RED.

PS : Please feel free to revert in case of any doubt , will love to explain further....
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Re: A local department store hires college students for one   [#permalink] 29 Sep 2016, 13:03
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