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# Mechanicorp s newest product costs so little to make that it

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Director
Joined: 01 Feb 2003
Posts: 842

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Mechanicorp s newest product costs so little to make that it [#permalink]

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28 May 2005, 13:44
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Question Stats:

100% (00:01) correct 0% (00:00) wrong based on 1 sessions

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Mechanicorpâ€™s newest product costs so little to make that it appears doubtful the company will be able to sell it without increasing the markup the company usually allows for profit: potential clients would simply not believe that something so inexpensive would really work. Yet Mechanicorpâ€™s reputation is built on fair prices incorporating only modest profit margins.
The statements above, if true, most strongly support which of the following?
(A) Mechanicorp will encounter difficulties in trying to set a price for its newest product that will promote sales without threatening to compromise the companyâ€™s reputation.
(B) Mechanicorp achieves large annual profits, despite small profits per unit sold, by means of a high volume of sales.
(C) Mechanicorp made a significant computational error in calculating the production costs for its newest product.
(D) Mechanicorpâ€™s newest product is intended to perform tasks that can be performed by other devices costing less to manufacture.
(E) Mechanicorpâ€™s production processes are designed with the same ingenuity as are the products that the company makes

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Director
Joined: 27 Dec 2004
Posts: 896

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28 May 2005, 15:34
I think B

(A) Mechanicorp will encounter difficulties in trying to set a price for its newest product that will promote sales without threatening to compromise the companyâ€™s reputation.
This is out because this information has already been provided in the stem thus it is redundant.

(B) Mechanicorp achieves large annual profits, despite small profits per unit sold, by means of a high volume of sales.
This had better be true otherwise, how does Mecanicorp manage to stay in business?

(C) Mechanicorp made a significant computational error in calculating the production costs for its newest product.
This is out of scope because the stem doesnâ€™t mention anything about computational errors

(D) Mechanicorpâ€™s newest product is intended to perform tasks that can be performed by other devices costing less to manufacture.
Out of scope

(E) Mechanicorpâ€™s production processes are designed with the same ingenuity as are the products that the company makes
Out of scope. Stem doesnâ€™t discuss anything about other products that the company makes or ingenuity.

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Director
Joined: 18 Feb 2005
Posts: 668

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28 May 2005, 15:39
Agree with Folaa B it is

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Director
Joined: 03 Nov 2004
Posts: 850

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28 May 2005, 18:09
One more for B

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VP
Joined: 18 Nov 2004
Posts: 1431

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28 May 2005, 18:18
"A"...directly supported by the stem that there is a dilemma on what Mechanicorp shud do

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SVP
Joined: 05 Apr 2005
Posts: 1708

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28 May 2005, 18:34
Another A.
the whole argument is about the difficulties, actually i say it is a paradoxical condition, Machinecorp is going to face in the future.

B is not true because the passage talks nothing about large volume and large annual profits.

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Senior Manager
Joined: 07 Nov 2004
Posts: 453

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28 May 2005, 21:41
I will pick A.

B is not right because high volume of sale is not guaranteed and I cannot see any inference indicate that from the stem.

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Senior Manager
Joined: 21 Mar 2004
Posts: 445

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Location: Cary,NC

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29 May 2005, 12:29
One more for A. Follows directly from the passage.

BCE are out of scope.
High volumes, computational errors, production processes all don't follow from the passage.
D is also out because nothing is mentioned about other devices.
_________________

ash
________________________
I'm crossing the bridge.........

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SVP
Joined: 05 Apr 2005
Posts: 1708

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17 Jun 2005, 21:27
OA????????????

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Senior Manager
Joined: 17 May 2005
Posts: 270

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Location: Auckland, New Zealand

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17 Jun 2005, 22:56
I'd say A as that is the most obvious conclusion that can be drawn from the statements

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17 Jun 2005, 22:56
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