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# Increase Lawton’s average proﬁt margin per job

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Intern
Joined: 28 Oct 2012
Posts: 22
Concentration: Technology, Real Estate
Increase Lawton’s average proﬁt margin per job [#permalink]

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10 Jan 2014, 02:25
1
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25% (medium)

Question Stats:

74% (01:25) correct 26% (02:22) wrong based on 198 sessions

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Due to recent success, Lawton, a contractor, can be more selective than in the past regarding the types of clients he chooses to service. If he restricts his business to commercial clients and only those residential clients requiring \$10,000 of work or more, he would cease doing most of the kind of residential work he currently does, which would allow him to earn a higher average proﬁt margin per job.

Which of the following, if true, would most strengthen the conclusion that limiting his service in the manner cited would increase Lawton’s average proﬁt margin per job?

A. Lawton’s recent success is due primarily to an upsurge in the number of residential clients he services.

B. Lawton’s commercial clients would prefer that he focus more of his time and energy on their projects and less on the concerns of his residential clients.

C. Residential work for which Lawton cannot bill more than \$10,000 comprises a significant proportion of his low-proﬁt-margin work.

D. Due to the use of a more efficient cost-accounting system, Lawton’s average profit margin per job has increased in each of the last three years.

E. Commercial jobs typically take longer to complete than residential jobs.
Manager
Joined: 20 Jul 2012
Posts: 148
Location: India
WE: Information Technology (Computer Software)
Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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10 Jan 2014, 07:05
aalokk wrote:
Due to recent success, Lawton, a contractor, can be more selective than in the past regarding the types of clients he chooses to service. If he restricts his business to commercial clients and only those residential clients requiring \$10,000 of work or more, he would cease doing most of the kind of residential work he currently does, which would allow him to earn a higher average proﬁt margin per job.

Which of the following, if true, would most strengthen the conclusion that limiting his service in the manner cited would increase Lawton’s average proﬁt margin per job?

A. Lawton’s recent success is due primarily to an upsurge in the number of residential clients he services.

B. Lawton’s commercial clients would prefer that he focus more of his time and energy on their projects and less on the concerns of his residential clients.

C. Residential work for which Lawton cannot bill more than \$10,000 comprises a significant proportion of his low-proﬁt-margin work.

D. Due to the use of a more efficient cost-accounting system, Lawton’s average profit margin per job has increased in each of the last three years.

E. Commercial jobs typically take longer to complete than residential jobs.

A. Lawton’s recent success is due primarily to an upsurge in the number of residential clients he services.-It is actually weakening the argument.We need to prove that commercial clients are more profitable- WRONG

B. Lawton’s commercial clients would prefer that he focus more of his time and energy on their projects and less on the concerns of his residential clients.-OUT OF SCOPE..spending more time and energy for commercial clients doesnt mean that his business will be profitable

C. Residential work for which Lawton cannot bill more than \$10,000 comprises a significant proportion of his low-proﬁt-margin work._CORRECT- since residential work doesnt bill a lot.. he can stop working for it and focus his time and energy on more profitable(commercial) work-

D. Due to the use of a more efficient cost-accounting system, Lawton’s average profit margin per job has increased in each of the last three years.OUT OF SCOPE

E. Commercial jobs typically take longer to complete than residential jobs- OUT OF SCOPE - doesnt tell about its effect on profit
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Director
Joined: 03 Feb 2013
Posts: 906
Location: India
Concentration: Operations, Strategy
GMAT 1: 760 Q49 V44
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Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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10 Jan 2014, 08:31
aalokk wrote:
Due to recent success, Lawton, a contractor, can be more selective than in the past regarding the types of clients he chooses to service. If he restricts his business to commercial clients and only those residential clients requiring \$10,000 of work or more, he would cease doing most of the kind of residential work he currently does, which would allow him to earn a higher average proﬁt margin per job.

Which of the following, if true, would most strengthen the conclusion that limiting his service in the manner cited would increase Lawton’s average proﬁt margin per job?

A. Lawton’s recent success is due primarily to an upsurge in the number of residential clients he services.

B. Lawton’s commercial clients would prefer that he focus more of his time and energy on their projects and less on the concerns of his residential clients.

C. Residential work for which Lawton cannot bill more than \$10,000 comprises a significant proportion of his low-proﬁt-margin work.

D. Due to the use of a more efficient cost-accounting system, Lawton’s average profit margin per job has increased in each of the last three years.

E. Commercial jobs typically take longer to complete than residential jobs.

Premise :
1) L can be more selective.
2) Only Commercial and Residential > \$10K => Not same as current project.

Conclusion : Would allow L to earn more average proﬁt margin per job.

a) Lawton’s recent success is due primarily to an upsurge in the number of residential clients he services.
So what? Doesn't strengthen.

b) Lawton’s commercial clients would prefer that he focus more of his time and energy on their projects and less on the concerns of his residential clients.
But Residential project more than \$10K should also help to earn more proﬁt margin per job.

c) Residential work for which Lawton cannot bill more than \$10,000 comprises a significant proportion of his low-proﬁt-margin work.
By continuing the current job, L cannot earn more more proﬁt margin per job. - Strengthens the conclusion - Hold

d) Due to the use of a more efficient cost-accounting system, Lawton’s average profit margin per job has increased in each of the last three years.
Cost accounting system - OFS

e) Commercial jobs typically take longer to complete than residential jobs.
Weakener

Hence Option D)
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Kinjal

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Senior Manager
Joined: 04 May 2013
Posts: 332
Location: India
Concentration: Operations, Human Resources
Schools: XLRI GM"18
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Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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11 Jan 2014, 05:41
Due to recent success, Lawton, a contractor, can be more selective than in the past regarding the types of clients he chooses to service. If he restricts his business to commercial clients and only those residential clients requiring \$10,000 of work or more, he would cease doing most of the kind of residential work he currently does, which would allow him to earn a higher average proﬁt margin per job.

Which of the following, if true, would most strengthen the conclusion that limiting his service in the manner cited would increase Lawton’s average proﬁt margin per job?

A. Lawton’s recent success is due primarily to an upsurge in the number of residential clients he services....REASON FOR RECENT SUCCESS..... OUT OF SCOPE...

B. Lawton’s commercial clients would prefer that he focus more of his time and energy on their projects and less on the concerns of his residential clients....WHAT HIS CLIENTS PREFER HIM TO DO DOES NOT AFFECT HIS RECENT SUCCESS.....

C. Residential work for which Lawton cannot bill more than \$10,000 comprises a significant proportion of his low-proﬁt-margin work.... THAT COULD HAVE LED TO HIS PLAN .....CORRECT...

D. Due to the use of a more efficient cost-accounting system, Lawton’s average profit margin per job has increased in each of the last three years.......Lawton’s average profit margin per job DOES NOT MATTER

E. Commercial jobs typically take longer to complete than residential jobs....TIME MARGIN NOT IMPORTANT HERE.....
Manager
Joined: 20 Dec 2013
Posts: 123
Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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11 Jan 2014, 06:28
Recent Success > Lawton (contractor) can be more selective.
Most of residential work he does = less than 10,000\$ + lesser avg profit margin per job than he can earn

Option A > weakening the argument
Option B > about preferences, not the actual avg profit margin per job
Option C > Strengthening (most of residential work he does = low-profit margin)
Option D > No relation to strengthening the argument
Option E > mentions time / irrelevant

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SVP
Joined: 12 Dec 2016
Posts: 1876
Location: United States
GMAT 1: 700 Q49 V33
GPA: 3.64
Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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27 Nov 2017, 22:04
A is an important pattern that can help to spot a wrong answer. Test takers must be aware of this pattern.
Intern
Joined: 27 Sep 2016
Posts: 2
Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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28 Nov 2017, 00:54
Ans is C as Argument is about average high profit of margin. If Lawton stops doing low profit of margin work, his average profit of margin will increase and that is what Argument is talking about.

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Manager
Joined: 15 Sep 2016
Posts: 73
Location: Pakistan
Concentration: Finance, Technology
Schools: CBS '20
GMAT 1: 640 Q43 V35
Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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28 Nov 2017, 02:01
chesstitans wrote:
A is an important pattern that can help to spot a wrong answer. Test takers must be aware of this pattern.

Hi @chesstitans- the pattern you are mentioning is opposite answer pattern?

Sent from my SM-N900 using GMAT Club Forum mobile app
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SVP
Joined: 12 Dec 2016
Posts: 1876
Location: United States
GMAT 1: 700 Q49 V33
GPA: 3.64
Re: Increase Lawton’s average proﬁt margin per job [#permalink]

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28 Nov 2017, 14:25
KungFuGmat wrote:
chesstitans wrote:
A is an important pattern that can help to spot a wrong answer. Test takers must be aware of this pattern.

Hi @chesstitans- the pattern you are mentioning is opposite answer pattern?

Sent from my SM-N900 using GMAT Club Forum mobile app

the pattern in A keeps appearing in many gmat questions. That is, A gives a cause for a premise, but obviously, the cause has nothing to do, or does not help to strengthen / weaken / assumption / explain.
Re: Increase Lawton’s average proﬁt margin per job   [#permalink] 28 Nov 2017, 14:25
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