On the first day of last month, a magazine seller had in stock 300 cop

Question

On the first day of last month, a magazine seller had in stock 300 copies of Magazine X, costing $4 each. During the month, the seller purchased more copies of Magazine X. What was the total amount of inventory, in dollars, of Magazine X at the end of the month?

(1) The seller purchased 100 copies of Magazine X for $3.75 each during the month.
(2) The total revenue from the sale of Magazine X was $800 during the month.

doomedcat · Answer

Stat1) states seller bought additional 100 x 3.75$ worth inventory during the month , but we do not know what happened with the month ie how much did he sell so as to calculate the amount of inventory at the end of the month, hence insuff

stat2) given amount of inventory sold but does not specifies how much was bought in hence, insuff

both , we know how much additional was bought and how much was sold hence we can find the total inventory ; it would be 300 x 4 + 100 x 3.75 - 800 = 775$

C

Manfo · Answer

I suppose we are looking for the amount of inventory calculated in terms of the cost of magazines.

Formula should be: Initial inventory cost + cost of additional purchases - cost of sold magazines

We don't have the cost of sold magazines. How can we obtain the cost amount of inventory sold if (2) gives you only the revenues? We would need at least revenues quantity. Moreover we don't know if the seller sold the 4$ magazines or the 3.75$ ones.

VaCeFe · Answer

I agree with that. For me answer is E

doomedcat · Answer

No, My friend i suppose you miss the point where it is given in stat 2 that revenue from the sale of Magazine X was $800, There is no need to know about cost of sold magazines, all we need to know is that the sale cost $800 (irrespective of $4 or $3.75 cost price) from the existing total $ inventory.

shreya5 · Answer

Given,

at the beginning: 300 copies for $4 each so stock worth $1200

Fact 1- The seller purchased 100 copies of Magazine X for $3.75 each during the month. So, stock worth $375. Total stock $1200+$375= $1575

But we do not know about the stock sold. So, insufficient.

Fact 2- The total revenue from the sale of Magazine X was $800 during the month. But no information about additional stock purchased. So, insufficient.

On combining: Total stock worth  $1575  - Revenue from stock sold  $800  = Total amount of inventory left at the end  $775

So combined it is sufficient. Answer: C

rahulkashyap · Answer

how does knowing the revenue help you assess the value of the remaining stock?

let us say you have 100 copies, priced at 4 dollars each.
Lets say you sold 1 copy, for 100 dollars (for some reason )
or 2 copies for 100 dollars, 50 each
your stock has 99 copies or 98 copies left, the value of stock is 99x4 or 98x4
shouldnt the ans be e?

https://gmatclub.com/forum/at-the-begin ... fl=similar --- similar question with answer E
chetan2u

Manfo · Answer

I think your reasoning is flawed since you’re evaluating stock in terms of cost and sold magazines in terms of revenues. This is not coherent.

Profit = revenues - costs

If we are given only the revenues we can’t find the cost of sold magazines. And obviously we can’t subtract the revenues of sold magazines from the total amount of inventory cost in order to obtain the cost of inventory (as said before is not coherent). You have to apply the same approach to evaluate both in order to subtract one from another.

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chetan2u · Answer

rahulkashyap ...

The equation 4*300+100*3.75-800 is clearly flawed..
Because  the answer depends on how many are sold in this 800 ..

A slight ambiguous word is 'costing' - is it the selling price or the cost at which the magazine was purchased..

I would say the question means ..
The selling price is 4 and cost price is 3.75...
So when we combine both sentences ...
Total amount of inventory @ selling price is 4*(300+100)=1600
Amount sold - 800

Inventory left 1600-800=800

But otherwise, the answer should be E in present state..
Combined we do not know the cost price of earlier 300 or the number of magazines sold in 800$

dollytaneja51 · Answer

Can somebody please explain why E is not the correct answer?

As per my understanding, E should be correct.

Posted from my mobile device

dvishal387 · Answer

From statement 1 we can get the amount by the total value of inventory increased and from stat 2 we get the total value by which the inventory decreased.
So, we can add the difference of the two quantities from the two statements and add it to the initial inventory value to get final one.
So, C is the correct choice.
Hope it answers your question.

Sent from my Redmi Note 3 using  GMAT Club Forum mobile app

nehasomani33 · Answer

thinkvision  - Can you help me explain the reason for answer C.

As i understand that we are not given any information regarding the selling price of the product. Therefore, we can not calculate the cost of the units sold, so as to get the COST of the inventory.

thinkvision · Answer

nehasomani33  - As per the given data, the question is ambiguous. Also, not even sure about the source of this question. I would suggest to focus only on GMAT Official sources.

mattisweb · Answer

Multiple things wrong with this one in my mind. First of all, cost can mean selling price (to the customer), or purchasing price (to the seller). If we assume it to be the price the seller bought it for (Statement 1 hints at this kind of price), then we cannot determine value of inventory, cause it would depend on inventory costing methods.

On the first day of last month, a magazine seller had in stock 300 cop

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