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# Last year, a certain company began manufacturing product X

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Intern
Joined: 20 May 2012
Posts: 20

Kudos [?]: 32 [0], given: 9

Last year, a certain company began manufacturing product X [#permalink]

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05 Jun 2012, 15:09
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Difficulty:

55% (hard)

Question Stats:

61% (01:40) correct 39% (02:58) wrong based on 36 sessions

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Last year, a certain company began manufacturing product X and sold every unit of product X that it produced. Last year the company's total expenses for manufacturing product X were equal to \$100,000 plus 5% of the company's total revenue from all units of product X sold. If the company made a profit on product X last year, did the company sell more than 21000 units of product X?

(1) The company's total revenue from the sale of product X last year was greater than \$110,000
(2) For each unit of product X sold last year, the company's revenue was \$5

OPEN DISCUSSION OF THIS QUESTION IS HERE: https://gmatclub.com/forum/last-year-a- ... 44141.html
[Reveal] Spoiler: OA

Kudos [?]: 32 [0], given: 9

Joined: 29 Mar 2012
Posts: 323

Kudos [?]: 498 [2], given: 23

Location: India
GMAT 1: 640 Q50 V26
GMAT 2: 660 Q50 V28
GMAT 3: 730 Q50 V38
Re: Last year, a certain company began manufacturing product X [#permalink]

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05 Jun 2012, 22:09
2
KUDOS
Hi,

It is given that the total expense for the company = 100,000 + 5% of total revenue (let say, x)
Profit = Total revenue - expenses = x - (100000 + 0.05x) = 0.95x - 100000
Since profit > 0
therefore, 0.95x - 100000 > 0 ...(a)

using (1) The company's total revenue from the sale of product X last year was greater than \$110,000,
we can only check whether 0.95x - 100000 is positive or not. Insufficient.

using (2) For each unit of product X sold last year, the company's revenue was \$5,
lets find the minimum number of units,
number of units = total revenue/5 = x/5
or 0.95(x/5) - 100000 >0 ....(from (a))
or x > 21052, thus x is greater than 21000. Sufficient.

Regards,

Kudos [?]: 498 [2], given: 23

Intern
Joined: 21 Jul 2017
Posts: 40

Kudos [?]: 2 [1], given: 39

Location: India
GMAT 1: 750 Q51 V41
GPA: 4
Re: Last year, a certain company began manufacturing product X [#permalink]

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14 Sep 2017, 10:57
1
KUDOS

Kudos [?]: 2 [1], given: 39

Math Expert
Joined: 02 Sep 2009
Posts: 41601

Kudos [?]: 124047 [0], given: 12070

Re: Last year, a certain company began manufacturing product X [#permalink]

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14 Sep 2017, 21:59
Val1986 wrote:
Last year, a certain company began manufacturing product X and sold every unit of product X that it produced. Last year the company's total expenses for manufacturing product X were equal to \$100,000 plus 5% of the company's total revenue from all units of product X sold. If the company made a profit on product X last year, did the company sell more than 21000 units of product X?

(1) The company's total revenue from the sale of product X last year was greater than \$110,000
(2) For each unit of product X sold last year, the company's revenue was \$5

Last year, a certain company began manufacturing product X and sold every unit of product X that it produced. Last year the company's total expenses for manufacturing product X were equal to \$100,000 plus 5 percent of the company's total revenue from all units of product X sold. If the company made a profit on product X last year, did the company sell more than 21,000 units of product X last year?

Since the company made a profit, then R-(100,000+0.05R)>0 --> R>2,000,000/19=~105,000.

(1) The company's total revenue from the sale of product X last year was greater than \$110,000 --> R>110,000. Its possible that company sold just one unit for say \$120,000 or 120,000 units for \$1. Not sufficient.

(2) For each unit of product X sold last year, the company's revenue was \$5. If total of n units were sold, then the total revenue would be \$5n, so R=5n --> 5n>2,000,000/19 --> n>400,00/19>21,000. Sufficient.

OPEN DISCUSSION OF THIS QUESTION IS HERE: https://gmatclub.com/forum/last-year-a- ... 44141.html
_________________

Kudos [?]: 124047 [0], given: 12070

Re: Last year, a certain company began manufacturing product X   [#permalink] 14 Sep 2017, 21:59
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