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

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

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New post 31 Jul 2014, 22:24
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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.
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Re: In 2003, the Making Hits Record Company spent 40% of its total budget  [#permalink]

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

+1 D

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

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

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

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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

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

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

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

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New post 02 Aug 2018, 02:17
VeritasPrepMimi wrote:
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.

Great explanation but I think the question stem lead us directly to the answer" met its budget" , it doesn't ask about anything related to the number of copies sold etc.
So ans. is D
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Re: In 2003, the Making Hits Record Company spent 40% of its total budget &nbs [#permalink] 02 Aug 2018, 02:17

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