Quote:
Accountant: We need the new sewing machines for the jacket contract, which will not be finished in time for us to make dress shirts unless we start the jackets next week. To install the machines this week, we must pay workers overtime—for which there is no money.
Executive: We can contract for sweatshirts instead of dress shirts. The contract will be as profitable but can be started two weeks later—that way we can avoid any overtime work.
For the executive’s plan to succeed in avoiding the need for overtime, which of the following must be true?
A. Workers who sew jackets and shirts will know how to install industrial sewing machines.
B. The new sewing machines can be installed by the end of next week without overtime work.
C. If the new sewing machines are installed without overtime work, the jacket contract can be completed on time without overtime work.
D. Workers can sew sweatshirts faster on the new machines than on the old ones.
E. A sweatshirt does not take longer to sew than a dress shirt.
I think treating this question like a math problem would make it easier.
Question asks: For executive's plan to succeed in avoiding overtime, which must be true?
In the stem, the executive says: avoiding
any overtime work. This means: Overtime for installing machines (mark it as: OT1) + Overtime for making the sweatshirts (mark it as: OT2)
So, we need to find an option that negates the need for both OT1 as well as OT2.
A: Doesn't address anything about overtime, we can have different sets of workers too.
B: Great, this option does clarify that OT1 can be negated. We won't need workers working overtime to install machines. But we still don't know anything about OT2, and hence cannot confidently say that
any type of overtime work will be avoided. Let's see if we can find something more complete.
C: This option says that, if installing sewing machines isn't an issue i.e. they are installed on time, then the jacket contract can be completed without overtime.
Now, in the stem, it states that the jacket contract and the sweatshirt contract have similar profitability. Usually, whenever profit for a contract is calculated, one takes into account the expected wages to be paid to workers. Overtime wages aren't usually expected/planned wages, and hence would affect the profitability of a contract.
If the jacket contract can be completed without any overtime work i.e. there were no extra costs in terms of overtime wages, and the sweatshirt contract's profitability is similar to the jacket's, then no overtime would be paid for the sweatshirt's contract too - because we need to keep the profit of both the contracts similar.
Say normal profit was calculated to be $100 for both contracts, overtime wages, if needed, are $20. So, if a contract requires overtime wages to be paid, profit will reduce to $80. The option says that the jacket contract needs no overtime (its profit is $100), and at the same time the question says that jacket's profit = sweatshirt's profit = $100. This can only be true if the sweatshirt's contract also requires no overtime. This negates OT2.
The stem also mentions that the sweatshirt order can be started 2 weeks later. So, instead of installing machines in this week on overtime, it is plausible that it can be done over the next 2 weeks without overtime.
Combine everything and reread option C as: If OT1 is not needed, then OT2 is also not needed. So, the stem indicates that OT1 is not needed - which in turn tells us that OT2 is not needed. In a way, this option is closer than option B in negating OT1 + OT2. This is the best option we have till now.
D: Even if workers can work faster, but is it fast enough to ensure we don't need overtime? Can't negate OT2.
E: Sweatshirt might not take longer, but is it still less enough to ensure we don't need overtime? Can't negate OT2.