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# In 2003, the Making Hits Record Company spent 40% of its

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Manager
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31 Aug 2011, 06:09
i agree with D.
SFR could spend no more than 20% of it's budget on overhead expenes, while MRH spent 30% on overhead expenses, so the precentage (KEYWORD) on those expenses is bigger in MRH (30%) than in SFR( maximum 20%).

other choices relates to revenue (we can not tell because we do not know the differences in the budget between the companies-like in C) OR amount of money(we never given the budgets- so we do not know how much money was spent-like in A and B)
OR CASUAL CONNECTION with no basis (who says that the marketing caused the higher sellings.maybe SFR produced 10 BEATLES records and MRH produced 10 Bieber's records (well the comparison is not that correct because Bieber sells a lot-but i hiope you understood)
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31 Aug 2011, 06:10
+1 D.
Key point in eliminating A,B,C is that it refers to certain fix numbers instead of percentage.
For E, causal relation is assumed.
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31 Aug 2011, 07:35
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dimri10 wrote:
i agree with D.
SFR could spend no more than 20% of it's budget on overhead expenes, while MRH spent 30% on overhead expenses, so the precentage (KEYWORD) on those expenses is bigger in MRH (30%) than in SFR( maximum 20%).

other choices relates to revenue (we can not tell because we do not know the differences in the budget between the companies-like in C) OR amount of money(we never given the budgets- so we do not know how much money was spent-like in A and B)
OR CASUAL CONNECTION with no basis (who says that the marketing caused the higher sellings.maybe SFR produced 10 BEATLES records and MRH produced 10 Bieber's records (well the comparison is not that correct because Bieber sells a lot-but i hiope you understood)

Correct me if am wrong..

A B C E can be eliminated..As far as D goes, aren't we assuming(since it is not categorically mentioned) that SFR will be spending remaining 20% in overheads only and nothing else. Would that be a far-fetched assumption in this case?What if they are spending the 20% in say R&D(Just say).In that case the comparison between SFR and MRH with respect to overheads wont hold true. Let me know..
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31 Aug 2011, 09:18
OptimusPrimea1 wrote:
Correct me if am wrong..

A B C E can be eliminated..As far as D goes, aren't we assuming(since it is not categorically mentioned) that SFR will be spending remaining 20% in overheads only and nothing else. Would that be a far-fetched assumption in this case?What if they are spending the 20% in say R&D(Just say).In that case the comparison between SFR and MRH with respect to overheads wont hold true. Let me know..

Making Hits spends 100-(40+30)=30% on budget
Song Factory can spend 100-(20+60)=20% on whatever they like. If they end up spending all 20% on overheads, their overhead will still be less than overhead of Making Hits.

D. In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
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31 Aug 2011, 13:14
OptimusPrimea1 wrote:
Correct me if am wrong..

As far as D goes, aren't we assuming(since it is not categorically mentioned) that SFR will be spending remaining 20% in overheads only and nothing else. Would that be a far-fetched assumption in this case?What if they are spending the 20% in say R&D(Just say).In that case the comparison between SFR and MRH with respect to overheads wont hold true. Let me know..

In this case:
SFR spent 0% of its budget in overhead costs.
We know, MRH spent 30% of its budget in overhead costs.

Extreme case:
SFR spent 20% of its budget in overhead costs.
We know, MRH spent 30% of its budget in overhead costs.

D says:
MRH spent a larger % of ITS budget on overhead costs than did the Song Factory.

D will be true in any case, without any assumption.
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31 Aug 2011, 19:17
fluke wrote:
OptimusPrimea1 wrote:
Correct me if am wrong..

As far as D goes, aren't we assuming(since it is not categorically mentioned) that SFR will be spending remaining 20% in overheads only and nothing else. Would that be a far-fetched assumption in this case?What if they are spending the 20% in say R&D(Just say).In that case the comparison between SFR and MRH with respect to overheads wont hold true. Let me know..

In this case:
SFR spent 0% of its budget in overhead costs.
We know, MRH spent 30% of its budget in overhead costs.

Extreme case:
SFR spent 20% of its budget in overhead costs.
We know, MRH spent 30% of its budget in overhead costs.

D says:
MRH spent a larger % of ITS budget on overhead costs than did the Song Factory.

D will be true in any case, without any assumption.

Hmmm..Noted Guys..
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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01 Sep 2011, 13:34
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D is the only missing factor: overhead costs. so D
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Dec 2011, 00:17
This one is a direct D. Arrange the costs as follows:

Name Of Company-------------Production Costs-----Marketing Costs-----Overhead Costs-----Number of Copies Sold

Making Hits Record Company----40-------------------------30----------------------30----------------------800,000
Song Factory Record Company---20-------------------------60----------------------20----------------------1,600,000

All the costs are expressed in percentage (%).

Thus, according to the overhead costs for each of the companies, we can see that Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. That is exactly what D says. Simple arithmetic and data arrangement help us solve this problem quickly too.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Dec 2011, 00:38
D for me also
A ) this talks about amount, but we have all info in %age
B ) cant be concluded as again we have all information in %age
C ) cant be concluded as we don’t have information on selling price.
D ) Yes as it’s stating the obvious 30 % versus 20% overhead.
E ) possible but again to much assumption we need to do
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Dec 2011, 20:50
This one is a direct D. Arrange the costs as follows:

Name Of Company-------------Production Costs-----Marketing Costs-----Overhead Costs-----Number of Copies Sold

Making Hits Record Company----40-------------------------30----------------------30----------------------800,000
Song Factory Record Company---20-------------------------60----------------------20----------------------1,600,000

All the costs are expressed in percentage (%).

Thus, according to the overhead costs for each of the companies, we can see that Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. That is exactly what D says. Simple arithmetic and data arrangement help us solve this problem quickly too.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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10 Jan 2012, 06:19
How can we assume that the cost grouping of the 2 companies are the same, i.e. that Song Factory Company spent 20% of its budget on overhead costs? It is nowhere said so and one has to assume it. For example, it could easily be that Song F.C spent 10% of its budget on overhead and another 10% on sales agents that the other company didn´t have.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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21 Jan 2012, 01:41
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siddharthmuzumdar wrote:
This one is a direct D. Arrange the costs as follows:

Name Of Company-------------Production Costs-----Marketing Costs-----Overhead Costs-----Number of Copies Sold

Making Hits Record Company----40-------------------------30----------------------30----------------------800,000
Song Factory Record Company---20-------------------------60----------------------20----------------------1,600,000

All the costs are expressed in percentage (%).

Thus, according to the overhead costs for each of the companies, we can see that Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. That is exactly what D says. Simple arithmetic and data arrangement help us solve this problem quickly too.

But why are we assuming that the Total budget of Making Hits = Total budget of Song factory?
eg. Total budget of Making Hits = 100 , 30% of 100 --> 30
Total budget of Song factory= 200 , 20% of 200 --> 40
Then how come D is the ans?
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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21 Jan 2012, 03:13
D for me.
A) we can't prove this from the infromation given.

b) we can't trust percentages. if song factory's budget is more than Making hit's, then the \$ amount (represented by 20%) is more than the \$ amount spent by making hit (40%)

C)higher numbers doesn't mean higher revenue. making hit could have sold 800,000 \$50 a copy, and song factory could have sold its 1,600,000 copies for \$5 a copy.

D)true, comparing percentages with percentages

E) again, we can't compare numbers with percentages

hope this helps
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Jan 2012, 04:45
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Let X and Y be the budgets of MHRC and SFRC respectively.
MHRCo. spent 40% of X ----- production of ten albums
30% of X ----- marketing
20% of X ----- Overhead costs
Sold 800,000 copies

SFRCo. spent 20% of Y ----- production of 10 albums
60% of Y ----- marketing
80% of Y ----- Overhead Costs
Sold 1,600,000 copies

Assuming each company met its budget, which of the following conclusions is best supported by the information given above? Hence, we should not assume anything other than what is mentioned in the stimulus.

(A) The amount of money spent on marketing is directly related to the number of copies sold. We don't know X, Y. So we can't say anything about the amount of money spent.
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory. Same argument here too. We don't know X and Y.
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits. We don't know what the selling prices were, so we cannot conclude anything from this statement.
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. We know that MHRC spent 30% of X on OC and that SFRC spent 20% of Y on OC. True!
(E) The Song Factory sold more copies of its 2003 albums than Making Hits did because the Song Factory
spent a higher percentage of its budget on the marketing of its albums. Again, we don't know X and Y
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Jan 2012, 19:48
+1 D
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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30 Jan 2012, 23:09
+1D
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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31 Jan 2012, 07:43
I go with D too. One of the important concept to be noted is the difference between the absolute amount and the percentage.There is no additional data given for us to confirm surely that an increase in the sales is a result of the increase in the spending of marketing .
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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25 Mar 2012, 05:46
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rait_m wrote:
How can we assume that the cost grouping of the 2 companies are the same, i.e. that Song Factory Company spent 20% of its budget on overhead costs? It is nowhere said so and one has to assume it. For example, it could easily be that Song F.C spent 10% of its budget on overhead and another 10% on sales agents that the other company didn´t have.

Hi,
In any case, Making Hits spent 30% of its budget on Overhead costs..

Song Factory's Production + Marketing = 80%
Even if there are more divisions in the company OverHead costs will be less than 30% only..

I hove this clarifies..

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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Mar 2012, 17:28
+1 D

Remember that only we have percentages! We don't know how much money exactly spent each company.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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26 Mar 2012, 21:17
This issue is number and statistic problem. Easily, we can eliminate all choice except choice D.
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Re: In 2003, the Making Hits Record Company spent 40% of its   [#permalink] 26 Mar 2012, 21:17

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