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16 Jun 2021, 21:00
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Cost: (C)
Gross
profit: (A)
profit: (A)
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
79% (02:57) correct
21%
(02:58)
wrong
based on 843
sessions
History
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It costs a certain company $100 to buy each unit of X, $200 for each unit of Y, and $300 for each unit of Z. The company then sells each unit of X for $200, each unit of Y for $300, and each unit of Z for $400. There are no other costs or revenue associated with X, Y, or Z. The company wants to select one of the following goals to prioritize.
A. Buy and then sell 3 units of X, 5 units of Y, and 4 units of Z.
B. Buy and then sell 2 units of X, 2 units of Y, and 3 units of Z.
C. Buy and then sell 8 units of X, 1 unit of Y, and 1 unit of Z.
D. Buy and then sell 2 units of X, 4 units of Y, and 2 units of Z.
E. Buy and then sell 1 unit of X, 4 units of Y, and 5 units of Z.
Select the goal that the company should prioritize to minimize its total Cost for X, Y, and Z and the goal that the company should prioritize to maximize its total Gross profit for X, Y, and Z. Make only two selections, one in each column.
A. Buy and then sell 3 units of X, 5 units of Y, and 4 units of Z.
B. Buy and then sell 2 units of X, 2 units of Y, and 3 units of Z.
C. Buy and then sell 8 units of X, 1 unit of Y, and 1 unit of Z.
D. Buy and then sell 2 units of X, 4 units of Y, and 2 units of Z.
E. Buy and then sell 1 unit of X, 4 units of Y, and 5 units of Z.
Select the goal that the company should prioritize to minimize its total Cost for X, Y, and Z and the goal that the company should prioritize to maximize its total Gross profit for X, Y, and Z. Make only two selections, one in each column.
| Cost |
Gross profit |
|
| (A) | ||
| (B) | ||
| (C) | ||
| (D) | ||
| (E) | ||
| (F) |
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Official Answer
Cost: (C)
Gross
profit: (A)
profit: (A)
rocky620
Retired Moderator
Joined: 10 Nov 2018
Last visit: 11 May 2023
Posts: 479
Given Kudos: 229
Location: India
Concentration: General Management, Strategy
Schools: IIMA PGPX'22 IIMB EPGP'22 IIMC PGPEX'22 ISB'22
GMAT 1: 590 Q49 V22
WE:Other (Retail: E-commerce)
27 Jul 2021, 11:47
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The cost for each Goal:
A. Buy and then sell 3 units of X, 5 units of Y, and 4 units of Z. = 300+1000+1200 = 2500
B. Buy and then sell 2 units of X, 2 units of Y, and 3 units of Z. = 200+400+900 = 1500
C. Buy and then sell 8 units of X, 1 unit of Y, and 1 unit of Z. = 800+200+300 = 1300
D. Buy and then sell 2 units of X, 4 units of Y, and 2 units of Z. = 200+800+600 = 1600
E. Buy and then sell 1 unit of X, 4 units of Y, and 5 units of Z. = 100+800+1500 = 2400
So, Goal C will have the minimum cost.
The Profit For Each Plan:
Since the Profit on each type of product - X, Y, and Z - is constant, $100, we just need to check which Goal has maximum number of units (buy and sell)
A = 12 units
B = 7 Units
C = 10 Units
D = 8 Units
E = 10 Units
So, Goal A will yield maximum profit
A. Buy and then sell 3 units of X, 5 units of Y, and 4 units of Z. = 300+1000+1200 = 2500
B. Buy and then sell 2 units of X, 2 units of Y, and 3 units of Z. = 200+400+900 = 1500
C. Buy and then sell 8 units of X, 1 unit of Y, and 1 unit of Z. = 800+200+300 = 1300
D. Buy and then sell 2 units of X, 4 units of Y, and 2 units of Z. = 200+800+600 = 1600
E. Buy and then sell 1 unit of X, 4 units of Y, and 5 units of Z. = 100+800+1500 = 2400
So, Goal C will have the minimum cost.
The Profit For Each Plan:
Since the Profit on each type of product - X, Y, and Z - is constant, $100, we just need to check which Goal has maximum number of units (buy and sell)
A = 12 units
B = 7 Units
C = 10 Units
D = 8 Units
E = 10 Units
So, Goal A will yield maximum profit
11 Dec 2023, 09:02
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Howdy!
Did this on my handy dandy white board to assist a friend. Hope it helps.
Did this on my handy dandy white board to assist a friend. Hope it helps.
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File comment: Here's how I did it to explain it to a friend. Hope it helps.
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