Mega2010 wrote:
In 2003, the Making Hits Record Company spent 40% of its total budget on the production of ten albums, 30% of its budget on the marketing of these albums, and the remainder of its budget on overhead costs. In the same year, the Song Factory Record Company spent 20% of its total budget on the production of 10 albums and 60% of its budget on the marketing of these albums. Making Hits sold a total of 800,000 copies of the ten records it produced in 2003, while the Song Factory sold a total of 1,600,000 copies of the ten records it produced in 2003.
Assuming each company met its budget, which of the following conclusions is best supported by the information given above?
(A) The amount of money spent on marketing is directly related to the number of copies sold.
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
(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.
OFFICIAL EXPLANATION:
When drawing a conclusion, we must remember not to conclude too much; i.e., do not make unwarranted assumptions. In this case, we are looking for the conclusion that must be true based only on the information given in the passage without requiring any additional assumptions.
(A) While we are given information about the percentage of the total budgets spent on marketing, we have no information about the actual amount of money either company spent on marketing.
(B) While we are given information about the percentage of the total budgets spent on production, we have no information about the actual amount of money either company spent on production.
(C) Because we have no information on the sale price per copy for either company, we cannot make any conclusions about the revenue generated by either company. It’s very possible that Making Hits sold its copies at twice the price of the Song Factory copies, in which case the revenues for the two companies would be the same.
(D) CORRECT. Since Making Hits spent 40% of its budget on production, 30% on marketing, and the rest on overhead, we can conclude that Making Hits spent 30% of its budget on overhead. Since the Song Factory spent 20% of its budget on production and 60% on marketing, and met its budget, it could not have spent more than 20% on overhead. Therefore, Making Hits spent a higher percentage of its budget on overhead than did the Song Factory.
(E) A valid conclusion must be true. While it is possible, and perhaps even likely, that the percentage of the budget spent on marketing was a driver of sales, this is not necessarily true; there are many other factors that could have affected sales. For example, it is possible that the Song Factory sold more copies of its 10 albums because the music was better than the music produced at Making Hits, and not because the Song Factory spent a higher percentage on marketing.