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02 Feb 2005, 10:31
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Summer profits, the total sales recorded between June and August, determine the economic success or failure of seasonal businesses in Sweden. Sunglow, a retailer selling a sunscreen line, is an excellent example. Sunglow’s summer profits, on average, account for a two thirds of its yearly total receipts and about three-quarters of its yearly profits.
If the statements above are true, which of the following must also be true about Sunglow on the basis of them?
(A) Its fixed expenses per sunscreen sold are higher during the summer season than for any other three-month period.
(B) It makes more profit during the fall and spring quarters combined than during the summer season.
(C) Its per-product retail price is lower, on average, during the summer season than during any other three-month period.
(D) It makes less profit, on average, for a given dollar amount of sales from September to April combined than during the summer season.
(E) The per-product price it pays to wholesalers is higher, on average, during the summer season than from September to April.
If the statements above are true, which of the following must also be true about Sunglow on the basis of them?
(A) Its fixed expenses per sunscreen sold are higher during the summer season than for any other three-month period.
(B) It makes more profit during the fall and spring quarters combined than during the summer season.
(C) Its per-product retail price is lower, on average, during the summer season than during any other three-month period.
(D) It makes less profit, on average, for a given dollar amount of sales from September to April combined than during the summer season.
(E) The per-product price it pays to wholesalers is higher, on average, during the summer season than from September to April.
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03 Feb 2005, 10:01
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D.
A is incorrect because if your profits are up, typically your expenses would be less than normal, but nothing in the stem lends credence to anything about fixed expenses.
A is incorrect because if your profits are up, typically your expenses would be less than normal, but nothing in the stem lends credence to anything about fixed expenses.
03 Feb 2005, 10:39
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I would go with ‘D’
If the total receipts for the year is $12000 and the profit is $4000. Then during summer Sunglow’s total receipt is $8000 and profit is $3000 so during the rest of the year it will make $1000 on a total sale of $4000.
If the total receipts for the year is $12000 and the profit is $4000. Then during summer Sunglow’s total receipt is $8000 and profit is $3000 so during the rest of the year it will make $1000 on a total sale of $4000.
