The head baker at Barry's Bagels can either purchase flour in-person

Question

The head baker at Barry's Bagels can either purchase flour in-person from the local flour mill, Larry's Local Mill, or order a shipment of flour from an out-of-state mill, Isadore's Interstate Mill. The cost of the flour from Isadore's Interstate Mill is 10 percent less than the cost of the flour from Larry's Local Mill. Even after shipping and handling fees are added, it is still cheaper to order flour that has to be shipped from Isadore's than to buy flour locally from Larry's.

The statements above, if true, best support which of the following assertions?

A. Production costs at Isadore's Interstate Mill are 10 percent below those at Larry's Local Mill.

B. Buying flour from Isadore's Interstate Mill will eliminate 10 percent of the local flour mill jobs.

C. The shipping and handling fees for a batch of flour purchased from Isadore's Interstate Mill are less than 10 percent of the cost of an identical batch of flour purchased from Larry's Local Mill.

D. The shipping and handling fees for a batch of flour purchased from Isadore's Interstate Mill are more than 10 percent of the cost of Isadore's flour.

E. Isadore's Interstate Mill produces flour 10% more efficiently than Larry's Local Mill does.

Main CR Qs link - Main link - https://gmatclub.com/forum/cr-qs-600-700 ... 31508.html

thevenus · Accepted Answer

(C) wins
c) The shipping and handling fees for a batch of flour purchased from Isadore’s Interstate Mill
are less than 10 percent of the cost of an identical batch of flour purchased from Larry’s
Local Mill.

cost at larry mill of a given quantity of flour = $100
cost at isadore for the same = $90
shipping etc shud be less than $10 to stay prfitable at isadore, so (c)wins

aremaktsnuk · Answer

A. Production costs at Isadore’s Interstate Mill are 10 percent below those at Larry’s Local Mill. -  No Information Given, Irrelevant.

B. Buying flour from Isadore’s Interstate Mill will eliminate 10 percent of the local flour mill jobs. -  No Information Given, Irrelevant.

C. The shipping and handling fees for a batch of flour purchased from Isadore’s Interstate Mill are less than 10 percent of the cost of an identical batch of flour purchased from Larry’s Local Mill. -  Correct. Suppose $100 is the price of local product, and $90 (10% less) is of a foreign one. suppose the shipping and additional costs for handling is $5 (remember it will have to be less than $10 because otherwise it wouldn't be profitable to import product from abroad). calculation 10% of the local product gives us 10$, which is more the the handling fees of Isadora's production.

D. The shipping and handling fees for a batch of flour purchased from Isadore’s Interstate Mill are more than 10 percent of the cost of Isadore’s flour. -  replicating calculations above - we know that $5 shipping cost is less than 10% of the total cost (which is $10). - Incorrect

E. Isadore’s Interstate Mill produces flour 10% more efficiently than Larry’s Local Mill does. -  No Information Given, Irrelevant.

sheolokesh · Answer

Contenders are C and D...
Premises states local flour=$100, state flour(product+shipping+handing)=90$
D. The shipping and handling fees for a batch of flour purchased from Isadore’s Interstate Mill are more than 10 percent of the cost of Isadore’s flour.
Lets say, Local mill flour cost=$100, state mill flour cost=$80. Now, from D, shipping and handling=10% of 80, i.e total (product+shipping+handing)=$88. False.

So Option C is right..

sayan640 · Answer

"The cost of the flour from Isadore's Interstate Mill is 10 percent less than the cost of the flour from Larry's Local Mill."
Let the cost of flour from Larry's Local Mill be = 100 *x
Isodore's Interstate Mill's flour's cost is = 90*x
"Even after shipping and handling fees are added, it is still cheaper to order flour that has to be shipped from Isadore's than to buy flour locally from Larry's."
So Isodore's flour's cost + shipping and handling fees < 100 *x
90*x + shipping and handling fees < 100*x
shipping and handling fees < 10 *x

Now , 10 percent of the cost of flour from Larry's local mill = (100 * x * 10) / 100 = 10*x
So , shipping and handling fees is less than 10 percent of the cost of flour from Larry's local mill.

Option C says that "The shipping and handling fees for a batch of flour purchased from Isadore's Interstate Mill are less than 10 percent of the cost of an identical batch of flour purchased from Larry's Local Mill. "

Option C is the correct answer.
Please give me Kudos if you liked my explanation.

Bunuel · Answer

OFFICIAL EXPLANATION

The cost of flour from the local mill is higher than the cost of the flour from the out-of-state mill. However, when purchasing from the out-of-state mill, Barry’s Bagels must pay shipping and handling fees that would not apply to a purchase from the local mill. Purchasing the flour from the out-of-state mill will only be cheaper if those shipping and handling fees are smaller than the difference in the flour costs of the two suppliers. Also, we cannot assume any additional information or move beyond the scope of the given premises in order to find the conclusion.

(A) Lower production costs could explain the lower price of the flour from Isadore’s Interstate Mill, but there may be a variety of other reasons. We cannot state this conclusively.

(B) It is possible that the number of local flour mill jobs would be decreased, but no evidence in the passage leads to that conclusion.

(C) CORRECT.  This statement properly identifies the point that, for ordering from an out-of-state mill to be less expensive, the shipping and handling fees must be less than the difference in the flour costs of the two suppliers. Say, for example, that a batch of flour costs $100 from Larry’s Local Mill. The passage tells us that the same batch would cost $90 from Isadore’s Interstate Mill, yet when purchasing from Isadore’s, shipping and handling fees would apply. We are told that Isadore’s total cost is cheaper than Larry’s, so mathematically that is: $90 + Shipping & Handling < $100, which means that Shipping & Handling < $10 = 10% of the cost of flour from Larry’s.

(D) If shipping and handling fees were more than 10 percent, purchasing from the out-of-state supplier would be more expensive, not less.

(E) Higher efficiency could explain the lower price of the flour from Isadore’s Interstate Mill, but there may be a variety of other reasons. We cannot state this conclusively.

Anshika000 · Answer

rey ,why not (A), how can we only rely on the point (c)that transportation cost is 10% less than flour taken from another mill, there can be other expects which can affect the increase in cost.
 Bunuel  can u give me the reason

VerbalBot · Answer

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).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

The head baker at Barry's Bagels can either purchase flour in-person

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

The head baker at Barry's Bagels can either purchase flour in-person

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards