It is currently 23 Feb 2018, 12:08

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

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

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Senior Manager
Senior Manager
User avatar
Status: May The Force Be With Me (D-DAY 15 May 2012)
Joined: 06 Jan 2012
Posts: 268
Location: India
Concentration: General Management, Entrepreneurship
Reviews Badge
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 26 Mar 2012, 21:31
+1 D

Intially went for B but then picked D as percentages were mentioned & not absolute amounts as in B.

Took time deconstructing the question stem :-(
_________________

Giving +1 kudos is a better way of saying 'Thank You'.

Intern
Intern
User avatar
Joined: 02 Sep 2010
Posts: 44
Location: India
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 29 Oct 2012, 04:43
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.

I got D found OE, so posting it. :)

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.
_________________

The world ain't all sunshine and rainbows. It's a very mean and nasty place and I don't care how tough you are it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't about how hard ya hit. It's about how hard you can get it and keep moving forward. How much you can take and keep moving forward. That's how winning is done!

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 10332
Premium Member
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 05 Oct 2013, 01:06
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.
Manager
Manager
avatar
Status: Joining Cranfield Sep 2014
Joined: 01 Sep 2012
Posts: 65
Concentration: Technology, General Management
GMAT 1: 530 Q50 V14
GMAT 2: 630 Q48 V29
WE: Engineering (Energy and Utilities)
Reviews Badge
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 16 Oct 2013, 04:41
VerbalBot wrote:
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.


I choose E and got it wrong, well after reading the discussion, in which every one has marked D as choice, I want to understand why E is wrong. The choice E states that "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."

The question is asking on which of the conclusions is best supported by the information given above. Now since the question is asking a conclusion, how can answer be D "In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory" it does not make any sense, whereas Choice E states the right conclusion.

Experts, please help.
Manager
Manager
avatar
Status: Persevering
Joined: 15 May 2013
Posts: 217
Location: India
Concentration: Technology, Leadership
GMAT Date: 08-02-2013
GPA: 3.7
WE: Consulting (Consulting)
GMAT ToolKit User
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 16 Oct 2013, 08:54
amitbharadwaj7 wrote:
VerbalBot wrote:
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.


I choose E and got it wrong, well after reading the discussion, in which every one has marked D as choice, I want to understand why E is wrong. The choice E states that "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."

The question is asking on which of the conclusions is best supported by the information given above. Now since the question is asking a conclusion, how can answer be D "In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory" it does not make any sense, whereas Choice E states the right conclusion.

Experts, please help.


D is correct because that is the only one that can be arrived at and is implied in the argument.

E is wrong because you are assuming that more percentage spending on marketing led to higher sales and this being a conclusion question, you are not allowed to make any such assumption. Other assumption could be better song tracks led to higher sales, but these are assumptions and not conclusion.

And btw D makes complete sense,as mathematically speaking, It is a 70:80 ratio b/w the companies and so making hit records company did spend a larger percentage on overhead cost.
_________________

--It's one thing to get defeated, but another to accept it.

Manager
Manager
avatar
Joined: 15 Apr 2013
Posts: 61
Concentration: Human Resources, International Business
GMAT 1: 570 Q44 V25
GPA: 3
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 16 Oct 2013, 22:13
• The amount of money spent on marketing is directly related to the number of copies sold. Incorrect. talks about amount but we only know percentage spent.
• Making Hits spent more money on the production of its albums in 2003 than did the Song Factory. Incorrect. Again we don't exactly how much money they spent.
• Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.Incorrect. We don't know what the selling price is.
• In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. Correct. Seems correct as this supports the conclusion.
• 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. Incorrect. Out of scope.

I was stuck between D and E. But then D won. :)
Manager
Manager
avatar
Joined: 26 Sep 2013
Posts: 216
Concentration: Finance, Economics
GMAT 1: 670 Q39 V41
GMAT 2: 730 Q49 V41
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 05 Nov 2013, 14:29
This question REALLY bothers me. You don't know if the company had some other expense that it was spending on, so you can't say it all went to overhead. D is a pretty weak OA if you ask me.
Manager
Manager
User avatar
Joined: 22 Feb 2009
Posts: 206
GMAT ToolKit User
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 31 Jul 2014, 22:21
I will go for D. 30% on overhead for Making HIts and 20% ( assumed) on overhead for Song Factory
_________________

.........................................................................
+1 Kudos please, if you like my post

1 KUDOS received
Manager
Manager
User avatar
Joined: 22 Feb 2009
Posts: 206
GMAT ToolKit User
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 31 Jul 2014, 22:24
1
This post received
KUDOS
AccipiterQ wrote:
This question REALLY bothers me. You don't know if the company had some other expense that it was spending on, so you can't say it all went to overhead. D is a pretty weak OA if you ask me.


I will go for D. You know for sure that Making Hits spent 30% of its total budget on overhead. For Songs Factory, since it's already used 80% on marketing and production, the rest is 20%. So the maximum amount can be spent on overhead is 20% ( it could be less than that if, as you said, the company had some other expense). Then you still can conclude that Making Hits spent larger percentage on overhead.
_________________

.........................................................................
+1 Kudos please, if you like my post

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 10332
Premium Member
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 29 Oct 2014, 19:17
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.
Manager
Manager
avatar
Joined: 12 Oct 2014
Posts: 60
Location: India
Concentration: Finance, General Management
GMAT 1: 550 Q44 V21
WE: Analyst (Investment Banking)
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 28 Jun 2015, 22:08
**Alert** GMAT favorite Percentage trap..

+1 D

Cheers,
Gaurav :)
Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 10332
Premium Member
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 23 Jul 2015, 19:33
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.
Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 10332
Premium Member
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 25 Apr 2016, 02:14
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.
Moderator
avatar
D
Joined: 21 Jun 2014
Posts: 986
Location: India
Concentration: General Management, Technology
GMAT 1: 540 Q45 V20
GPA: 2.49
WE: Information Technology (Computer Software)
Premium Member CAT Tests
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 14 Jul 2016, 11:44
Making hits record company:
Production - 40%
Marketing - 30%
Overhead - remaining (30%)

Song Factory :
Production - 20%
Marketing - 60%
Overhead - remaining (20%)

so yes, Making hits record company spent larger % than Song factory on Overhead costs.

D it is.
_________________

---------------------------------------------------------------
Target - 720-740
http://gmatclub.com/forum/information-on-new-gmat-esr-report-beta-221111.html
http://gmatclub.com/forum/list-of-one-year-full-time-mba-programs-222103.html

Manager
Manager
User avatar
B
Joined: 26 Mar 2016
Posts: 77
Location: Greece
GMAT 1: 710 Q51 V34
GPA: 2.9
Reviews Badge
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 14 Jul 2016, 16:07
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
The passage clearly states that Making Hits spent an X amount of money on overhead costs. Nothing mentioned for the Song Factory.
So R1=30% > R2=20%.
So I will go with D too.

IMO (D)
_________________

+1 Kudos if you like the post :)

Verbal Forum Moderator
User avatar
P
Joined: 19 Mar 2014
Posts: 992
Location: India
Concentration: Finance, Entrepreneurship
GPA: 3.5
GMAT ToolKit User Premium Member
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 15 Apr 2017, 12:06
As this is a CR question, let’s start by reading the question stem first. This question about – BEST SUPPORTS – which means this is a – INFERENCE QUESTION.

Arguments Logical Structure:

MFR Spent – 40% - Production
30% - Marketing
30% - Overhead Cost (As it says remainder cost)
SFR Spent - 20% - Budget
60% - Marketing
SFR is now left with 20% of the budget which we don’t know yet where it is spent.

Let’s try to think about the possible inference (1 or 2) for this question. Note, we are not trying to predict the exact answer but we are trying to be close to the possible answer and also this will help us to eliminate the incorrect option choices.

Some inferences - Production % of MFR > Production % of SFR, Marketing % of MFR is < Marketing % of SFR and Overhead Cost % of MFR > Overhead cost of SFR.

Let's review our answer choices with keeping this points in consideration.


(A) The amount of money spent on marketing is directly related to the number of copies sold.
- This cannot be inferred as we don’t know how much money is spent on marketing. We only know %


(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
- Once again, this talks about amount spent – same explanation as that for A


(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
- Revenue is not at all discussed in the passage, applying our own thought can make us fall into the trap. So, C is incorrect to


(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
- As you know from the argument that MFR spent 30% on overhead cost, and SFR should have spent either entire 20% or anything less than 20%. This means MFR has spent more percent of its budget on overhead than SFR. – This look like the answer, lets hold this and real the last option.


(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.
- Though this may sound correct but it is a good trap. There can be multiple other factors which can lead to more sales, may the quality of the song was good, etc. E is incorrect.

Correct answer is C

_________________

"Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent."

Best AWA Template: https://gmatclub.com/forum/how-to-get-6-0-awa-my-guide-64327.html#p470475

Manager
Manager
avatar
S
Joined: 17 Aug 2012
Posts: 172
Location: India
Concentration: General Management, Strategy
Schools: Copenhagen, ESMT"19
GPA: 3.75
WE: Consulting (Energy and Utilities)
GMAT ToolKit User CAT Tests
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 27 Apr 2017, 10:24
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.

Whatever the percentage of overhead cost , it will be less than that of Making Hits.
Answer is D
Intern
Intern
avatar
B
Joined: 02 Jan 2015
Posts: 9
Premium Member
Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

Show Tags

New post 29 Apr 2017, 03:26
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?

MHR -------- SFR
Prod 40 20
Mark. 30 60
OV 30 Do not know.

Total
Selling 800K 1600K (Double than MHR)

Pre-thinking - There is some relation between Marketing Cost and higher selling Or Production cost with higher selling.With this thinking we will do POE.

(A) The amount of money spent on marketing is directly related to the number of copies sold. -(Keep It -OK)
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory. -------->we can not tell because we do not know total budget for each comp so ---OUT
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits. ----> Again we can conclude anything about revenue
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory. This is correct answer because in 2003 MFR OH Cost = 30% of its budget but for SFR it always be OH cost <= 10% of its budget.
(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. -- This is true but we do not know exact/accurate reason for higher selling.

Now between A & D ----> The amount of money ................. (we can't say because we do not know budget for both comp , so A out.
D is correct.

Hope it will help in understanding.
Re: In 2003, the Making Hits Record Company spent 40% of its   [#permalink] 29 Apr 2017, 03:26

Go to page   Previous    1   2   3   [ 58 posts ] 

Display posts from previous: Sort by

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

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.