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In 1987, Fabrico, a clothing manufacturer, sold a total of

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In 1987, Fabrico, a clothing manufacturer, sold a total of 2.3 million dollars’ worth of clothing, a 17 percent increase over 1986 sales. In January 1988, however, Fabrico closed one of its clothing factories, citing reduced demand for its products as the major reason. Which one of the following, if true about 1987, contributes most to a resolution of the apparent discrepancy between the sales figures and the reason offered for closing a factory?

(A) The total worldwide dollar value of clothing sales by manufacturers increased by 5 percent over sales in 1986.

(B) Fabrico’s employees dropped earlier demands for a 25 percent increase in company-paid benefits and a 15 percent increase in hourly wages.

(C) Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.

(D) Fabrico introduced several new styles of clothing that were generally praised by fashion critics and that sold very well.

(E) Fabrico spent less on capital improvements than it did in 1986, when it added new plant capacity and new equipment.
[Reveal] Spoiler: OA

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Kudos [?]: 17622 [1], given: 1986

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Re: In 1987, Fabrico, a clothing manufacturer, sold a total of [#permalink]

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(C) Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.

Sale in dollar value = [Nos. of Units sold X Unit Rate]
say in 1986: total sale = USD 100 [say breakup is 10X10]
in 1987 total sale = USD 117. Now acc. to C, Unit rate increased by 42%
=> USD 117 = [8.24 X 14.2]

Therefore, Discrepancy is explained by stating that although Total sale value increased but total demand decreased by having increas in prices.
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Re: In 1987, Fabrico, a clothing manufacturer, sold a total of [#permalink]

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Re: In 1987, Fabrico, a clothing manufacturer, sold a total of   [#permalink] 11 Sep 2017, 05:44
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