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

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

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08 Oct 2010, 01:20
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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?

• The amount of money spent on marketing is directly related to the number of copies sold.

• Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.

• Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.

• In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.

• 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.

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

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08 Oct 2010, 02:03
Got it right.Only D gives a clear cut conclusion.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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08 Oct 2010, 02:05
Picked C
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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08 Oct 2010, 02:36
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@rudransh:
C is irrerelvent .. out of scope..just check once more...
for more clarity ..try my method of solving CR questions at ..

cr-solving-methods-102443.html

i got benefitted greatly

n dont forget to press KUDOS..in case u like it:)
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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08 Oct 2010, 03:06
yup got it ..is D
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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08 Oct 2010, 08:13
harshsingla 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?
• The amount of money spent on marketing is directly related to the number of copies sold.
• Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
• Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
• In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
• 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.

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Is this really 700+?

D is clearly the only possible answer, and it doesn't require any reasoning - it's directly stated in the article that Making Hits spent 30% while Song Factory spent 20%.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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08 Oct 2010, 09:40
This is one of those CR problems that's a quant problem in disguise. What they're really asking you to do is crunch the numbers and realize that Making Hits spent 30% of its budget on overhead, whereas the maximum possible that Song Factory could have spent on overhead was 20% of its budget. Because we don't know the actual numbers that those percentages are taken of, we can't compare amounts of money, eliminating A) and B). We don't know the selling price of the albums, eliminating C). And E) suggests a cause and effect relationship that goes to far in reaching for a conclusion. The correct answer, D), demonstrates what is so often true on inference problems: a conservative answer is a better answer.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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08 Oct 2010, 11:45
picked D was between D and C so I kinda guessed at the last minute.
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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10 Jan 2012, 07:19
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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25 Mar 2012, 06:46
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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..

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

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26 Mar 2012, 18:28
+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, 22:17
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]

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26 Mar 2012, 22:31
+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
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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05 Oct 2013, 02:06
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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16 Oct 2013, 05:41
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).

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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.

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

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16 Oct 2013, 09:54
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).

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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.

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

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29 Oct 2014, 20:17
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Re: In 2003, the Making Hits Record Company spent 40% of its [#permalink]

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28 Jun 2015, 23:08

+1 D

Cheers,
Gaurav
Re: In 2003, the Making Hits Record Company spent 40% of its   [#permalink] 28 Jun 2015, 23:08
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