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CharuKapoor
Posts: 27
Updated on: 18 Jan 2020, 06:14
Originally posted by CharuKapoor on 30 Apr 2013, 14:04.
Last edited by Bunuel on 18 Jan 2020, 06:14, edited 2 times in total.
Last edited by Bunuel on 18 Jan 2020, 06:14, edited 2 times in total.
Renamed the topic and edited the question.
Kudos
Bookmarks
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
15%
(low)
Question Stats:
82% (02:10) correct
18%
(02:27)
wrong
based on 2464
sessions
History
Date
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Not Attempted Yet
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.
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.
01 May 2013, 03:19
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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.
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.
30 Apr 2013, 15:45
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CharuKapoor
Good question
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.
