It is currently 23 Nov 2017, 21:00

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Source: MGMAT CR Adam will spend $4,000 to rent a booth at

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

1 KUDOS received
Manager
Manager
avatar
Status: ISB, Hyderabad
Joined: 25 Jul 2010
Posts: 168

Kudos [?]: 56 [1], given: 15

WE 1: 4 years Software Product Development
WE 2: 3 years ERP Consulting
Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 10 Oct 2010, 11:23
1
This post received
KUDOS
8
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  25% (medium)

Question Stats:

71% (01:00) correct 29% (01:05) wrong based on 548 sessions

HideShow timer Statistics

Source: MGMAT CR
Adam will spend $4,000 to rent a booth at the town’s annual county fair to promote his new Sandwich Shoppe. In previous years, the average food booth at the fair served 400 customers. Thus, in order to cover his costs, Adam has calculated that he must sell 400 sandwiches for $10 each.

Which of the following statements casts the most doubt on Adam’s chances of breaking even at the county fair?

A. Adam should not limit himself to 400 sandwiches; he should be prepared to sell more.
B. Adam has not factored in the costs of raw materials or labor in calculating the amount of revenue he needs to generate to break even.
C. If booths in previous years averaged 400 customers, that means some booths served more than 400 and some served fewer than 400.
D. Many people prefer other types of food to sandwiches.
E. If Adam shares his booth, and the cost of the rental, with a complementary business, he will not have to sell as many sandwiches to break even.

I don't agree with the OA. Your comments are most welcome.
[Reveal] Spoiler:
Explanantion: Each sandwich costs some amount of money to make and sell, so even if Adam sells the 400 sandwiches as planned, his net income will certainly be less than $4,000. Based on this statement, Adam definitely will not break even..
[Reveal] Spoiler: OA

_________________

-AD


Last edited by Skywalker18 on 28 Aug 2017, 10:59, edited 1 time in total.
answer options formatted

Kudos [?]: 56 [1], given: 15

Senior Manager
Senior Manager
User avatar
Joined: 25 Feb 2010
Posts: 448

Kudos [?]: 112 [0], given: 10

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 10 Oct 2010, 12:24
(A) if he could sell more than 400 sandwiches, it is likely that this would help him break even.

(B) CORRECT.

(C) this statement does not tell us that Adam will have fewer than 400 or that his plan cannot work.

(D) Out of scope..

(E) If he shares the cost of the booth rental, then he is more likely to sell
enough sandwiches to cover his costs.
_________________

GGG (Gym / GMAT / Girl) -- Be Serious

Its your duty to post OA afterwards; some one must be waiting for that...

Kudos [?]: 112 [0], given: 10

Joined: 31 Dec 1969

Kudos [?]: [0], given:

Location: Russian Federation
Concentration: Entrepreneurship, International Business
GMAT 3: 740 Q40 V50
GMAT 4: 700 Q48 V38
GMAT 5: 710 Q45 V41
GMAT 6: 680 Q47 V36
GMAT 9: 740 Q49 V42
GMAT 11: 500 Q47 V33
GMAT 14: 760 Q49 V44
WE: Supply Chain Management (Energy and Utilities)
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 11 Oct 2010, 15:04
A: does not weaken
C: we don't know : >400 => strengthens / < 400 => weakens
D: does not deal with the subject
E: does not weaken

=> B (raw materials + labor increase global costs while they were not taken into account by Adam)

Kudos [?]: [0], given:

Manager
Manager
avatar
Joined: 16 Jun 2010
Posts: 180

Kudos [?]: 103 [0], given: 5

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 12 Oct 2010, 02:34
Why do'nt you agree with the OA ? .... your reasons are highly anticipated. In the meanwhile I think the Official Explanation says it all and this is an Easy B
_________________

Please give me kudos, if you like the above post.
Thanks.

Kudos [?]: 103 [0], given: 5

Senior Manager
Senior Manager
avatar
Joined: 13 Aug 2010
Posts: 280

Kudos [?]: 36 [0], given: 1

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 12 Oct 2010, 05:07
Well i don't see any references for the initial costs, in the paragraph. We just know that the average costumer last time was 400, so i think our reasons should be built around facts provided. Well since B is the official answer then there is nothing we can do about it.

Kudos [?]: 36 [0], given: 1

Manager
Manager
avatar
Joined: 06 Aug 2010
Posts: 218

Kudos [?]: 230 [0], given: 5

Location: Boston
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 12 Oct 2010, 06:10
prab wrote:
Well i don't see any references for the initial costs, in the paragraph. We just know that the average costumer last time was 400, so i think our reasons should be built around facts provided. Well since B is the official answer then there is nothing we can do about it.


That's exactly the point. Adam's reasoning is that he's paying $4,000 and will sell around 400 sandwiches, so if he sells them for $10 each, he'll recoup his $4,000. But he didn't factor in the costs of making the sandwiches. When you include these costs, the total amount he needs to recoup is going to go above $4,000.

Kudos [?]: 230 [0], given: 5

Manager
Manager
avatar
Joined: 22 Jun 2010
Posts: 192

Kudos [?]: 127 [0], given: 13

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 12 Oct 2010, 06:21
just B obviously weakens the argument

Kudos [?]: 127 [0], given: 13

Senior Manager
Senior Manager
User avatar
Status: Can't give up
Joined: 20 Dec 2009
Posts: 305

Kudos [?]: 36 [0], given: 35

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 12 Oct 2010, 06:23
clearly B - if his cost turns out to be 1000 and he sells exactly 400 for 10* = 4000
therefore, 4000-1000 = 3000. he is under a loss.

Kudos [?]: 36 [0], given: 35

Manager
Manager
User avatar
Joined: 08 Sep 2010
Posts: 223

Kudos [?]: 327 [0], given: 21

Location: India
WE 1: 6 Year, Telecom(GSM)
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 12 Oct 2010, 11:26
I too hav doubt on OA.

Kudos [?]: 327 [0], given: 21

Expert Post
1 KUDOS received
Manhattan Prep Instructor
avatar
Joined: 29 Apr 2010
Posts: 125

Kudos [?]: 485 [1], given: 1

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 11 Dec 2010, 19:26
1
This post received
KUDOS
Expert's post
The wording of the question is what lets us make a clear choice here (B)--you're absolutely correct prab in pointing out that we don't have any information given about the initial costs. But the question asks for which choice "casts the most doubt" -- not disproves Adam's claim.

B in no way disproves Adam's claim about what he needs to sell to break even. But it directly addresses an assumption that underlies the argument as it is given. The other choices are "less good"for the reasons listed by the posters above-- that doesn't mean B is good; it just means B is the best of the flawed bunch.
_________________


JP Park | Manhattan GMAT Instructor | Los Angeles

Manhattan GMAT Discount | Manhattan GMAT Reviews

Kudos [?]: 485 [1], given: 1

Senior Manager
Senior Manager
User avatar
Status: Bring the Rain
Joined: 17 Aug 2010
Posts: 389

Kudos [?]: 47 [0], given: 46

Location: United States (MD)
Concentration: Strategy, Marketing
Schools: Michigan (Ross) - Class of 2014
GMAT 1: 730 Q49 V39
GPA: 3.13
WE: Corporate Finance (Aerospace and Defense)
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 13 Dec 2010, 08:33

Kudos [?]: 47 [0], given: 46

Manager
Manager
avatar
Joined: 31 May 2010
Posts: 94

Kudos [?]: 48 [0], given: 25

Reviews Badge
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 13 Dec 2010, 23:54
Its B
_________________

Kudos if any of my post helps you !!!

Kudos [?]: 48 [0], given: 25

Manager
Manager
User avatar
Joined: 07 Jul 2010
Posts: 91

Kudos [?]: 59 [0], given: 18

Location: Hanoi, Vietnam
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 25 Jan 2011, 10:18
B. too easy.
_________________

Hung M.Tran
Faculty of Banking and Finance,
National Economics University of Vietnam


Follow me on Twitter : http://twitter.com/AndyTranHung

Kudos [?]: 59 [0], given: 18

Manager
Manager
avatar
Joined: 08 Dec 2010
Posts: 199

Kudos [?]: 55 [0], given: 26

WE 1: 4 yr IT
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 25 Jan 2011, 11:42
B.straight forward
_________________

this time, we play for keeps

Kudos [?]: 55 [0], given: 26

Manager
Manager
User avatar
B
Joined: 12 Sep 2010
Posts: 241

Kudos [?]: 30 [0], given: 27

Concentration: Healthcare, General Management
GMAT ToolKit User Reviews Badge
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 25 Jan 2011, 16:27
Conclusion: "in order to cover his cost"

Cost includes the rent for the booth AND the materials/labors to make the sandwiches.

Lets suppose he sold 400 sandwiches to earn $4000, which will only cover the cost of renting the booth but not the cost of the materials/labors. Thus, B is correct.

Image Posted from GMAT ToolKit

Kudos [?]: 30 [0], given: 27

Manager
Manager
avatar
Joined: 27 Oct 2010
Posts: 179

Kudos [?]: 12 [0], given: 20

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 25 Jan 2011, 19:38
Clearly B as costs to make the sandwich need to be taken into consideration too.

Kudos [?]: 12 [0], given: 20

Manager
Manager
avatar
Joined: 14 Nov 2008
Posts: 66

Kudos [?]: 27 [0], given: 1

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 01 Sep 2013, 10:54
Adam concludes that to cover the $4,000 cost of a booth at the fair, he will need
to sell 400 sandwiches at $10 each. He relies on information about the number of
customers served by the average booth in previous years. The question asks
what most weakens Adam’s conclusion. The correct answer will either show that
Adam has overlooked other important costs, or that his logic is fundamentally
flawed. There could be more than one choice that seems to suggest that Adam
might not break even; the correct answer will be the one that eliminates any
possibility that he will break even.
(A) Though this is certainly true in a practical sense, it does not show that Adam's
plan will not work and that he will not stay within his budget. In fact, if he could
sell more than 400 sandwiches, it is likely that this would help him break even.
(B) CORRECT. Each sandwich costs some amount of money to make and sell,
so even if Adam sells the 400 sandwiches as planned, his net income will
certainly be less than $4,000. Based on this statement, Adam definitely will not
break even.
(C) Though it is true that an average number of customers means some booths
served more and some served fewer, this statement does not tell us that Adam
will have fewer than 400 or that his plan cannot work. Consider also that each
customer might buy more than one sandwich, so Adam could have fewer
customers but still sell enough sandwiches to cover his costs.
(D) Although some people will buy other types of food at the fair, this statement
fails to conclusively weaken Adam’s logic. Adam relied on information about the
average number of customers for food booths in previous years, but those
booths may have sold sandwiches or other foods – we simply don’t have enough
information to judge whether this statement strengthens or weakens Adam’s
conclusion.
(E) Sharing the booth would actually make it more likely that Adam would break
even. If he shares the cost of the booth rental, then he is more likely to sell
enough sandwiches to cover his costs.

Kudos [?]: 27 [0], given: 1

Intern
Intern
avatar
Joined: 14 Feb 2012
Posts: 27

Kudos [?]: 5 [0], given: 6

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 02 Oct 2013, 07:40
arundas wrote:
Source: MGMAT CR
Adam will spend $4,000 to rent a booth at the town’s annual county fair to promote his new Sandwich Shoppe. In previous years, the average food booth at the fair served 400 customers. Thus, in order to cover his costs, Adam has calculated that he must sell 400 sandwiches for $10 each.

Which of the following statements casts the most doubt on Adam’s chances of breaking even at the county fair?

Adam should not limit himself to 400 sandwiches; he should be prepared to sell more.
Adam has not factored in the costs of raw materials or labor in calculating the amount of revenue he needs to generate to break even.
If booths in previous years averaged 400 customers, that means some booths served more than 400 and some served fewer than 400.
Many people prefer other types of food to sandwiches.
If Adam shares his booth, and the cost of the rental, with a complementary business, he will not have to sell as many sandwiches to break even.

I don't agree with the OA. Your comments are most welcome.
[Reveal] Spoiler:
Explanantion: Each sandwich costs some amount of money to make and sell, so even if Adam sells the 400 sandwiches as planned, his net income will certainly be less than $4,000. Based on this statement, Adam definitely will not break even..


And yet another awful formulated question.

Kudos [?]: 5 [0], given: 6

Senior Manager
Senior Manager
User avatar
Joined: 03 Dec 2012
Posts: 329

Kudos [?]: 188 [0], given: 291

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 08 Oct 2013, 04:26
B in no way is a straightforward choice. Who are we to assume that Adam did not take into account the miscellaneous costs while setting up the required selling price to be able to break even. No body would decide a S.P which will Any business on earth would know the math. B is definitely not a straightforward choice.

Kudos [?]: 188 [0], given: 291

Manager
Manager
avatar
Status: How easy it is?
Joined: 09 Nov 2012
Posts: 119

Kudos [?]: 102 [0], given: 174

Location: India
Concentration: Operations, General Management
GMAT 1: 650 Q50 V27
GMAT 2: 710 Q49 V37
GPA: 3.5
WE: Operations (Other)
GMAT ToolKit User Reviews Badge
Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at [#permalink]

Show Tags

New post 22 Sep 2014, 07:22
Pretty much agree with the explanation given for Option B, but do not understand why is Option C ruled out. This Selling Price, which ADAM has decided is based on his poor understanding of the concept of average. He came to the number 400 because he feels he ll be able to garner 400 customers as that is the average and thus chose a price of 10 USD for each sandwich. But what if he is able to garner only 300 customers, or even less? He will be not be able to cover his costs then. Answer choice C exposes this gap of his understanding. Doesn't it weaken (not destry, just casts a doubt) the conclusion?

Kudos [?]: 102 [0], given: 174

Re: Source: MGMAT CR Adam will spend $4,000 to rent a booth at   [#permalink] 22 Sep 2014, 07:22

Go to page    1   2    Next  [ 25 posts ] 

Display posts from previous: Sort by

Source: MGMAT CR Adam will spend $4,000 to rent a booth at

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.