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Holiday receipts the total sales recorded in the fourth

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Holiday receipts the total sales recorded in the fourth [#permalink]

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New post 30 Apr 2013, 13:04
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Question Stats:

79% (01:38) correct 21% (01:27) wrong based on 191 sessions

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Holiday receipts—the total sales recorded in the fourth quarter of the year—determine the economic success or failure of many retail businesses. Camco, a retailer selling just one camera model, is an excellent example. Camco's holiday receipts, on average, account for a third of its yearly total receipts and about half of its yearly profits.

If the statements above are true, which of the following must also be true about Camco on the basis of them?

(A) Its fixed expenses per camera sold are higher during the fourth quarter than for any of the other three quarters.
(B) It makes more profit during the first and third quarters combined than during the fourth quarter.
(C) Its per-camera retail price is lower, on average, during the fourth quarter than during any one of the first three quarters.
(D) It makes less profit, on average, for a given dollar amount of sales during the first three quarters combined than during the fourth quarter.
(E) The per-camera price it pays to wholesalers is higher, on average, during the fourth quarter than during any of the other three quarters.
[Reveal] Spoiler: OA

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Last edited by abhimahna on 15 Oct 2017, 09:13, edited 1 time in total.
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Re: Holiday receipts the total sales recorded in the fourth [#permalink]

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New post 30 Apr 2013, 14:45
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CharuKapoor wrote:
Holiday receipts—the total sales recorded in the fourth quarter of the year—determine the economic success or failure of many retail businesses. Camco, a retailer selling just one camera model, is an excellent example. Camco's holiday receipts, on average, account for a third of its yearly total receipts and about half of its yearly profits.

If the statements above are true, which of the following must also be true about Camco on the basis of them?

(A) Its fixed expenses per camera sold are higher during the fourth quarter than for any of the other three quarters.
(B) It makes more profit during the first and third quarters combined than during the fourth quarter.
(C) Its per-camera retail price is lower, on average, during the fourth quarter than during any one of the first three quarters.
(D) It makes less profit, on average, for a given dollar amount of sales during the first three quarters combined than during the fourth quarter.
(E) The per-camera price it pays to wholesalers is higher, on average, during the fourth quarter than during any of the other three quarters.


Good question :-D
IMO, D is correct.

The stimulus says:
- 4th quarter sales = 1/3 total sales,
- 4th quarter profit = 1/2 total profit.

==> Clearly, Camco makes more profit on average, for a given dollar amount of sales during the 4th quarter. It also means: Camco makes less profit, on average, for a given dollar amount of sales during the first three quarters combined than during the fourth quarter.

Waiting for OA.
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Re: Holiday receipts the total sales recorded in the fourth [#permalink]

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New post 01 May 2013, 02:19
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Camco's holiday receipts = 1/3 (yearly total receipts)
Example if yearly total receipts = 1000
Camco's holiday receipts =333.33
Camco's holiday profit = ½ (yearly profits)
Example if yearly profits = 100
Camco's holiday profit =50

So in fourth quarter Camco makes as much profit as in all 3 quarters combined by selling only 1/3rd amount of the year.
Which means profit per dollor sales is more in 4th quarter than all other quarters.

Hence Choice (D) is the correct answer.
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Re: Holiday receipts the total sales recorded in the fourth [#permalink]

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New post 01 May 2013, 03:09
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CharuKapoor wrote:
Holiday receipts—the total sales recorded in the fourth quarter of the year—determine the economic success or failure of many retail businesses. Camco, a retailer selling just one camera model, is an excellent example. Camco's holiday receipts, on average, account for a third of its yearly total receipts and about half of its yearly profits.

If the statements above are true, which of the following must also be true about Camco on the basis of them?

Many retail businesses make a living on sales from the fourth quarter, i.e. holiday receipts. For Camco the receipts on average account for 1/3 of Total yearly receipts and for 1/2 Total yearly profits.

\(\frac{Number[Q_4]}{Number[Q_1+Q_2+Q_3+Q_4]}=\frac{1}{3}\)


\(\frac{Profit[Q_4]}{Profit[Q_1+Q_2+Q_3+Q_4]}=\frac{1}{2}\)


Quote:
(A) Its fixed expenses per camera sold are higher during the fourth quarter than for any of the other three quarters.

The expenses could be lower, same or higher. Dependant on the selling price, the equations would still be true.

Quote:
(B) It makes more profit during the first and third quarters combined than during the fourth quarter.

What about the second quarter? We cannot split the year in this way, since the argument distinguishes between the fourth quarter and the rest three quarters.

Quote:
(C) Its per-camera retail price is lower, on average, during the fourth quarter than during any one of the first three quarters.

May be true: Camco sells many more cameras during the 4th quarter than during the rest of the year. Economies of scale.
May not be true: Camco sells the average number of cameras at higher price, thus gaining greater profit.

Quote:
(D) It makes less profit, on average, for a given dollar amount of sales during the first three quarters combined than during the fourth quarter.

Must be true. Key words: "on average, for a given dollar amount of sales". Look at the equations.

Quote:
(E) The per-camera price it pays to wholesalers is higher, on average, during the fourth quarter than during any of the other three quarters.

Wrong for the same reason as A.
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Re: Holiday receipts the total sales recorded in the fourth [#permalink]

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Hello from the GMAT Club VerbalBot!

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Re: Holiday receipts the total sales recorded in the fourth [#permalink]

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New post 18 Oct 2017, 13:24
Hello from the GMAT Club VerbalBot!

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.

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Re: Holiday receipts the total sales recorded in the fourth [#permalink]

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New post 20 Nov 2017, 23:10
chose D based on elimination. no info given on per-camera hence A, C ,E are out. for B, 4th quarter account for about half its yearly profit so B may or may not be true, out.

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Re: Holiday receipts the total sales recorded in the fourth   [#permalink] 20 Nov 2017, 23:10
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