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

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

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New post 10 Oct 2009, 23:28
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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?

(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.
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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 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 total budget  [#permalink]

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New post 11 Oct 2009, 02:31
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.
( The deals with percentages so it is a very hard decision to take)
(B) Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
(40% of its total budget may or may not be greater than 20% of its total budget)
(C) Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
( Cannot be said. Number of copies is higher does not indicate the total revenues are greater)
(D) In 2003, Making Hits spent a larger percentage of its budget on overhead costs than did the Song Factory.
( Nothing is told about Song Factory overhead cost)
(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 seems good to me)
Reasonable conclusion to take. Will go for E.
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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 11 Oct 2009, 03:21
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I will go with D on this one.

Even if nothing is mentioned specifically about the overhead costs of SFRC, we get a clear hint that the overhead costs can be max 20% ( in case there are no other costs involved ) or 0% ( in case other costs are involved ). The budget cant overshoot 100%, so D makes sense.
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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 11 Oct 2009, 10:24
Economist wrote:
I will go with D on this one.

Even if nothing is mentioned specifically about the overhead costs of SFRC, we get a clear hint that the overhead costs can be max 20% ( in case there are no other costs involved ) or 0% ( in case other costs are involved ). The budget cant overshoot 100%, so D makes sense.


Yes, D it is. Good explanation. A and E both looks attractive but D is correct one.
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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 11 Oct 2009, 12:20
I shall switch to D. :-D
E indicated the marketing as only cause of increase in sales...but sales may increase due to other factors!
OA pls
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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 Nov 2009, 06:41
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 choose D as my answer. For example, The Making Hit Record Company spent 40% of its budget on the production of 10 albums, 30% on marketing, while the remainder percentage, which is 30% on overhead costs. We can also calculate the overhead costs for The Song Factor to be 20%. The problem with E is that we can't tell what's causing The Song Factory to seel more copies. We just know that they did.
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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 Nov 2009, 06:54
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 choose D as my answer. For example, The Making Hit Record Company spent 40% of its budget on the production of 10 albums, 30% on marketing, while the remainder percentage, which is 30% on overhead costs. We can also calculate the overhead costs for The Song Factor to be 20%. The problem with E is that we can't tell what's causing The Song Factory to sell more copies. We just know that they did.
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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 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 total budget  [#permalink]

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New post 08 Oct 2010, 02:36
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@rudransh:
C is irrerelvent .. out of scope..just check once more...
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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 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 total budget  [#permalink]

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New post 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 total budget  [#permalink]

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New post 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 total budget  [#permalink]

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New post 29 Apr 2011, 09:54
D is more direct and E is kind of shell game.
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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 Aug 2011, 06:41
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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.

Please go ahead with the explanations..
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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 Aug 2011, 06:56
D

The amount of money spent on marketing is directly related to the number of copies sold.
==> We don't know about the amount

Making Hits spent more money on the production of its albums in 2003 than did the Song Factory.
==> See A

Song Factory’s total revenue from the sale of albums produced in 2003 was higher than that of Making Hits.
==> No information given on $

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

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.
==> Causal relation can't be assumed
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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 Aug 2011, 07:09
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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Re: In 2003, the Making Hits Record Company spent 40% of its total budget  [#permalink]

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New post 31 Aug 2011, 07:10
+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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Re: In 2003, the Making Hits Record Company spent 40% of its total budget  [#permalink]

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New post 31 Aug 2011, 08:35
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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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Re: In 2003, the Making Hits Record Company spent 40% of its total budget  [#permalink]

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New post 31 Aug 2011, 10:18
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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Re: In 2003, the Making Hits Record Company spent 40% of its total budget &nbs [#permalink] 31 Aug 2011, 10:18

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