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# RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer

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RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 09:47
2
2
00:00

Difficulty:

15% (low)

Question Stats:

77% (01:35) correct 23% (01:51) wrong based on 364 sessions

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In 1987, Fabrico, a clothing manufacturer, sold a total of 2.3 million dollars’ worth of clothing, a 17 percent increase over 1986 sales. In January 1988, however, Fabrico closed one of its clothing factories, citing reduced demand for its products as the major reason.

Which one of the following, if true about 1987, contributes most to a resolution of the apparent discrepancy between the sales figures and the reason offered for closing a factory?

(A) The total worldwide dollar value of clothing sales by manufacturers increased by 5 percent over sales in 1986.

(B) Fabrico’s employees dropped earlier demands for a 25 percent increase in company-paid benefits and a 15 percent increase in hourly wages.

(C) Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.

(D) Fabrico introduced several new styles of clothing that were generally praised by fashion critics and that sold very well.

(E) Fabrico spent less on capital improvements than it did in 1986, when it added new plant capacity and new equipment. 74

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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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Updated on: 02 Oct 2014, 11:01
tough one..got it in 1:32..hope I am not wrong...
one of the assumptions ID'ed by me was in the answer choices..I'm afraid I might have been influenced by my own opinion :D

A - this is totally irrelevant. This does not explain why the demand for the clothes is reduced.
B - Ok, so if the employees asked for more benefits & increased wages, that means the costs are higher, but we need smth to prove that the demand decreased over this period. Therefore, this answer is not good for us.
C - Ha! costs for raw materials increased, leading to increased prices for the products. The products of this manufacturer can be "included" in the non-essential or not the most necessary products that are needed to live. We can conclude, from economics, that the demand for these products is elastic. Therefore, since the prices increased by 42%, the sales for the clothes dramatically reduced. This is what we are looking for! But better check the other two before deciding!
D - This one weakens the argument!
E - This is irrelevant. The costs are higher, but this does not prove that the demand for the products is not the same as it was before.

kudos if you like my post

Originally posted by mvictor on 01 Oct 2014, 09:58.
Last edited by mvictor on 02 Oct 2014, 11:01, edited 3 times in total.
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 10:01
when will u declare the answer?
CHEERS

souvik101990 wrote:
In 1987, Fabrico, a clothing manufacturer, sold a total of 2.3 million dollars’ worth of clothing, a 17 percent increase over 1986 sales. In January 1988, however, Fabrico closed one of its clothing factories, citing reduced demand for its products as the major reason.

Which one of the following, if true about 1987, contributes most to a resolution of the apparent discrepancy between the sales figures and the reason offered for closing a factory?

(A) The total worldwide dollar value of clothing sales by manufacturers increased by 5 percent over sales in 1986.

(B) Fabrico’s employees dropped earlier demands for a 25 percent increase in company-paid benefits and a 15 percent increase in hourly wages.

(C) Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.

(D) Fabrico introduced several new styles of clothing that were generally praised by fashion critics and that sold very well.

(E) Fabrico spent less on capital improvements than it did in 1986, when it added new plant capacity and new equipment. 74
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 10:13
when will u declare the answer?
CHEERS

souvik101990 wrote:
In 1987, Fabrico, a clothing manufacturer, sold a total of 2.3 million dollars’ worth of clothing, a 17 percent increase over 1986 sales. In January 1988, however, Fabrico closed one of its clothing factories, citing reduced demand for its products as the major reason.

Which one of the following, if true about 1987, contributes most to a resolution of the apparent discrepancy between the sales figures and the reason offered for closing a factory?

(A) The total worldwide dollar value of clothing sales by manufacturers increased by 5 percent over sales in 1986.

(B) Fabrico’s employees dropped earlier demands for a 25 percent increase in company-paid benefits and a 15 percent increase in hourly wages.

(C) Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.

(D) Fabrico introduced several new styles of clothing that were generally praised by fashion critics and that sold very well.

(E) Fabrico spent less on capital improvements than it did in 1986, when it added new plant capacity and new equipment. 74

The OA will be posted next monday.
Check this topic for more details: http://gmatclub.com/forum/race-against-the-gmat-club-timer-starts-9th-sep-181095-40.html#p1422035
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 10:20
I cannot believe I took so much time for this sitter.
Sales are up, but demand is down -> Only one conclusion.
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 10:22
it took me a lil over 2 minutes to make sure that the eliminated answers were infact wrong. Really need to work on time management. :/
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 10:27
for apparent discrepancy -- POE is the best way..... I have eliminated all five answers but one choice seems to be very close to the question. Hence marked XXX...
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 11:03
good one...
waiting for OA .....
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 11:08
Doesn't seem to be a 700-level?

wow!! ...SEE there...SEE there...that's a pod of Cetaceans sailing in the Caspian SEA
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 11:14
not sure of the answer.. can we start discussing the answers somewhere so that we can have a better understanding...
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 11:25
Narrowed down to 2 options.selected 1 caz of time.still think second can also be the answer.will explain my reasoning on monday.
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 14:14
I made my choice and looks like I have made it right. All the other wrong answers are not difficult to identify.

souvik101990 wrote:
In 1987, Fabrico, a clothing manufacturer, sold a total of 2.3 million dollars’ worth of clothing, a 17 percent increase over 1986 sales. In January 1988, however, Fabrico closed one of its clothing factories, citing reduced demand for its products as the major reason.

Which one of the following, if true about 1987, contributes most to a resolution of the apparent discrepancy between the sales figures and the reason offered for closing a factory?

(A) The total worldwide dollar value of clothing sales by manufacturers increased by 5 percent over sales in 1986.

(B) Fabrico’s employees dropped earlier demands for a 25 percent increase in company-paid benefits and a 15 percent increase in hourly wages.

(C) Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.

(D) Fabrico introduced several new styles of clothing that were generally praised by fashion critics and that sold very well.

(E) Fabrico spent less on capital improvements than it did in 1986, when it added new plant capacity and new equipment. 74
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 14:50
Hoping to have finally nailed the question this time with a correct answer !!
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 23:06
a couple of options seemed confusing..mostly because they would've been relevant had this been a 'Profits' question...however this was only about higher sales...that helped to narrow it down to two options...guess i've picked the right one..fingers crossed!
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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01 Oct 2014, 23:09
i think i got this one right.

My thoughts for this one. Its a paradox question , so we need some new information which can justify one statement and still hold the second statement true.

There were 2 such options , but one of them was clearer than other.

so i have a clear winner.

Shall i tell my answer ?
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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02 Oct 2014, 00:54
1
Looks more like a sub-600 question. Pre-thought a lot of different complex scenarios to explain the discrepancy but didnt expect the answer to be so simple.
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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03 Oct 2014, 03:43
I hope the option after the first two ones is the most appropriate..anyways fingers crossed :X
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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04 Oct 2014, 09:08
souvik101990 wrote:
In 1987, Fabrico, a clothing manufacturer, sold a total of 2.3 million dollars’ worth of clothing, a 17 percent increase over 1986 sales. In January 1988, however, Fabrico closed one of its clothing factories, citing reduced demand for its products as the major reason.

Which one of the following, if true about 1987, contributes most to a resolution of the apparent discrepancy between the sales figures and the reason offered for closing a factory?

(A) The total worldwide dollar value of clothing sales by manufacturers increased by 5 percent over sales in 1986.

(B) Fabrico’s employees dropped earlier demands for a 25 percent increase in company-paid benefits and a 15 percent increase in hourly wages.

(C) Because of escalating costs for raw materials, prices charged by Fabrico for its products were on average 42 percent higher than they were in 1986.

(D) Fabrico introduced several new styles of clothing that were generally praised by fashion critics and that sold very well.

(E) Fabrico spent less on capital improvements than it did in 1986, when it added new plant capacity and new equipment. 74

Okay, I believe that in the beginning we have to better understand whole situation, so i prefer to do quick notes on this question.

1987 - increase in sales by 17percent
1988 - fabric closed because of insufficient demand.

What we could assume ? We could assume that in 1987 was a clearance sale -> lower price x bigger number of items

(A) Shows increased aggregate demand - not decreased. BAD
(B) Cost decrease is not familiar with insufficient demand.
(C) Looks interesting, maybe the best answer, but because we compare with 1986 not with 1987 we could assume that improvement in price was also in 1987, which means that in 1987 with higher price the demand remained the same and total sales volume grew. SO WHY IT SHOULD BE CLOSED?:)

(D) States completely opposite
(E) Unfamiliar

I think that it is a bad question
However, i would go on C
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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06 Oct 2014, 20:59
i think i gave it the correct answer, however over 02 minutes is unbearable
after reading the premise i thought of a clearance sales too, unfortunately it doesn't appear in the answer choices
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Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer  [#permalink]

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08 Oct 2014, 02:54
imo C.
waiting for OA .. when will u post the answer ??
Re: RAGCT Day 17: In 1987, Fabrico, a clothing manufacturer &nbs [#permalink] 08 Oct 2014, 02:54

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