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Increase Lawton’s average profit margin per job

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Increase Lawton’s average profit margin per job [#permalink]

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New post 10 Jan 2014, 01:25
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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.
[Reveal] Spoiler: OA

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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 10 Jan 2014, 06:05
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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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 10 Jan 2014, 07:31
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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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 11 Jan 2014, 04:41
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.....

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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 11 Jan 2014, 05:28
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

Hence, answer is option C.
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Re: Increase Lawton’s average profit margin per job [#permalink]

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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 27 Nov 2017, 21:04
A is an important pattern that can help to spot a wrong answer. Test takers must be aware of this pattern.

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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 27 Nov 2017, 23:54
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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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 28 Nov 2017, 01:01
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?

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Re: Increase Lawton’s average profit margin per job [#permalink]

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New post 28 Nov 2017, 13:25
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?

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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.

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Re: Increase Lawton’s average profit margin per job   [#permalink] 28 Nov 2017, 13:25
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