GMAT Question of the Day - Daily to your Mailbox; hard ones only

It is currently 15 Oct 2018, 16:28

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

The fee a certain plumber charges for service is based on

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

Hide Tags

Manager
Manager
avatar
Joined: 25 Jun 2012
Posts: 62
Location: India
WE: General Management (Energy and Utilities)
The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 31 Jul 2012, 21:15
1
2
00:00
A
B
C
D
E

Difficulty:

  15% (low)

Question Stats:

75% (01:21) correct 25% (01:40) wrong based on 246 sessions

HideShow timer Statistics

The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.
Manager
Manager
avatar
B
Joined: 02 Nov 2009
Posts: 113
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 31 Jul 2012, 21:37
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.




what is your question in the above..
Manager
Manager
avatar
Joined: 25 Jun 2012
Posts: 62
Location: India
WE: General Management (Energy and Utilities)
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 31 Jul 2012, 21:49
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.


As per my understadning, OA should be C. Questions ask us that how the cost-plus method is advantageous to customers because as per C, plumbers are not adding labour cost. I f hey add labour cost also then,it will be very costly for customers,Thus, not adding labour cost is advantageous for customers for plumbers service.

Where am I wrong?
Intern
Intern
User avatar
Joined: 18 Jun 2012
Posts: 25
GMAT Date: 09-17-2012
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 01 Aug 2012, 00:04
bhavinshah5685 wrote:
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.


As per my understadning, OA should be C. Questions ask us that how the cost-plus method is advantageous to customers because as per C, plumbers are not adding labour cost. I f hey add labour cost also then,it will be very costly for customers,Thus, not adding labour cost is advantageous for customers for plumbers service.

Where am I wrong?


The stem reads "Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

So u need to give a reason criticizing the cost-plus method as economical advantage for customers.

C is strengthening the advantage, not criticizing the economic adv of customers. Hence A
Board of Directors
User avatar
P
Joined: 01 Sep 2010
Posts: 3305
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 01 Aug 2012, 12:37
Senior Manager
Senior Manager
User avatar
B
Joined: 11 May 2011
Posts: 336
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 01 Aug 2012, 16:59
The stem is pretty confusing for this question. Nevertheless, A is my answer.

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
_________________

-----------------------------------------------------------------------------------------
What you do TODAY is important because you're exchanging a day of your life for it!
-----------------------------------------------------------------------------------------

Board of Directors
User avatar
P
Joined: 01 Sep 2010
Posts: 3305
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 01 Aug 2012, 19:41
Capricorn369 wrote:
The stem is pretty confusing for this question. Nevertheless, A is my answer.

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.


I think is good as a question with a simple premise and conclusion. it has all the elements to be used for the purpose
_________________

COLLECTION OF QUESTIONS AND RESOURCES
Quant: 1. ALL GMATPrep questions Quant/Verbal 2. Bunuel Signature Collection - The Next Generation 3. Bunuel Signature Collection ALL-IN-ONE WITH SOLUTIONS 4. Veritas Prep Blog PDF Version 5. MGMAT Study Hall Thursdays with Ron Quant Videos
Verbal:1. Verbal question bank and directories by Carcass 2. MGMAT Study Hall Thursdays with Ron Verbal Videos 3. Critical Reasoning_Oldy but goldy question banks 4. Sentence Correction_Oldy but goldy question banks 5. Reading-comprehension_Oldy but goldy question banks

Manager
Manager
avatar
Joined: 16 Oct 2011
Posts: 85
Location: United States
Reviews Badge
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 03 Aug 2012, 13:21
bhavinshah5685 wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
B.The percentage added to the cost of an item has decreased over the past several years.
C.The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
D.Some past clients have criticized the quality of the plumber's work.
E.The "cost-plus" pricing method has been used by other plumbers in the region.


+A
The only criticism of cost-plus pricing as an economically helpful method...
Current Student
User avatar
P
Status: It always seems impossible until it's done!!
Joined: 29 Aug 2012
Posts: 1119
Location: India
WE: General Management (Aerospace and Defense)
GMAT ToolKit User Premium Member Reviews Badge
The fee a certain plumber charges for service is based on  [#permalink]

Show Tags

New post 26 Nov 2013, 08:08
2
2
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A. It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.

B. The percentage added to the cost of an item has decreased over the past several years.

C. The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.

D. Some past clients have criticized the quality of the plumber's work.

E. The "cost-plus" pricing method has been used by other plumbers in the region.
_________________

Become a GMAT Club Premium member to avail lot of discounts

Magoosh GMAT Instructor
User avatar
G
Joined: 28 Dec 2011
Posts: 4494
Re: The fee a certain plumber charges for service is based on  [#permalink]

Show Tags

New post 26 Nov 2013, 12:33
2
Gnpth wrote:
The fee a certain plumber charges for service is based on a "cost-plus" pricing method. The plumber charges for all items used in the work, and adds a set percentage.

Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?

A. It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.

B. The percentage added to the cost of an item has decreased over the past several years.

C. The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.

D. Some past clients have criticized the quality of the plumber's work.

E. The "cost-plus" pricing method has been used by other plumbers in the region.

Dear Gnpth,
I'm happy to help. :-)

This prompt argument is unusually short. In that sense, I believe it may be a bit unrepresentative of what you will see on the GMAT.

We want a fact that will be bad for the customer of this plumber --- a reason it might be disadvantageous for a customer to choose a plumber who uses "cost-plus" pricing. Presumably, this could mean that the customer is overcharged --- bad for the customer, good for the plumber.

(A) It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
If the plumber uses expensive items, especially unnecessarily, this will inflate his fee, which is good for the plumber, not good for the customer. This is a promising answer to the question.

(B) The percentage added to the cost of an item has decreased over the past several years.
First of all, this would be vaguely beneficial to the customer, and it's not clear that this speaks to anything inherently fair or unfair about the "cost-plus" price scheme itself. This is not correct.

(C) The plumber does not charge for labor costs, despite the extensive time requirements of some repair jobs.
Well, this definitely would be to the disadvantage of the plumber and the advantage of the customer. This is not correct.

(D) Some past clients have criticized the quality of the plumber's work.
Hmmm. Tempting. This, though, is more a problem with the plumber himself, not really a problem with the "cost-plus" scheme of charging. In other words, if this plumber actually does low quality work, than that would be a detriment regardless of the pricing scheme he used. This is not correct.

(E) The "cost-plus" pricing method has been used by other plumbers in the region.
This is neutral. Perhaps it's a good sign, meaning that it's a fair practice, or perhaps it's a bad sign --- it's a slanted scheme that allows plumbers to exploit their customers. This may be relevant or may not be. We don't have enough information. This is not correct.

The only possible answer is (A), the OA.

Here's a blog about weakening the argument.
http://magoosh.com/gmat/2012/how-to-wea ... reasoning/

Does this make sense?

Mike :-)
_________________

Mike McGarry
Magoosh Test Prep


Education is not the filling of a pail, but the lighting of a fire. — William Butler Yeats (1865 – 1939)

Senior Manager
Senior Manager
User avatar
Status: 1,750 Q's attempted and counting
Affiliations: University of Florida
Joined: 09 Jul 2013
Posts: 499
Location: United States (FL)
Schools: UFL (A)
GMAT 1: 600 Q45 V29
GMAT 2: 590 Q35 V35
GMAT 3: 570 Q42 V28
GMAT 4: 610 Q44 V30
GPA: 3.45
WE: Accounting (Accounting)
Re: The fee a certain plumber charges for service is based on  [#permalink]

Show Tags

New post 28 Nov 2013, 21:06
1
Here is the official explanation from Kaplan.

Answer A - The actual question here is particularly complicated. We're asked for a criticism of the economic advantage of this method of pricing from the customer's point of view. In other words, how could the plumber cheat the customer? The method is that the plumber charges the customer a set price for the items used for the work and adds a set percentage. Thus, a project using high-priced items is economically advantageous for the plumber; a project using low-priced items is advantageous for the customer. Since the plumber chooses the tools (items) necessary for the job, it's advantageous to choose the highest-priced items, which will also increase the percentage received. Choice (A) gives the disadvantage of this plan for the customer—an unscrupulous plumber could choose the highest-costing items, whether they are necessary or not. Choice (A) is the correct answer.

Choice (B) is a 180; a decrease in the percentage would be advantageous for the customer, not the plumber. Choice (C) is out of scope—we already know the cost is based solely on the items used and a set percentage, not labor. Moreover, it would be to the customer's advantage not to have to pay for labor if a job takes a long time. Choice (D) is out of scope; the quality of work is not an issue, only the method of pricing is. Choice (E) is also out of scope; the number of plumbers using the method is not the issue, only its economic advantageousness. Moreover, if anything, this would strengthen the argument, since it implies that customers in the region are satisfied enough with the method not to avoid plumbers who use it.


Image
Senior Manager
Senior Manager
User avatar
Status: 1,750 Q's attempted and counting
Affiliations: University of Florida
Joined: 09 Jul 2013
Posts: 499
Location: United States (FL)
Schools: UFL (A)
GMAT 1: 600 Q45 V29
GMAT 2: 590 Q35 V35
GMAT 3: 570 Q42 V28
GMAT 4: 610 Q44 V30
GPA: 3.45
WE: Accounting (Accounting)
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 28 Nov 2013, 21:16
Here is the official explanation from Kaplan

Answer A The actual question here is particularly complicated. We're asked for a criticism of the economic advantage of this method of pricing from the customer's point of view. In other words, how could the plumber cheat the customer? The method is that the plumber charges the customer a set price for the items used for the work and adds a set percentage. Thus, a project using high-priced items is economically advantageous for the plumber; a project using low-priced items is advantageous for the customer. Since the plumber chooses the tools (items) necessary for the job, it's advantageous to choose the highest-priced items, which will also increase the percentage received. Choice (A) gives the disadvantage of this plan for the customer—an unscrupulous plumber could choose the highest-costing items, whether they are necessary or not. Choice (A) is the correct answer.

Choice (B) is a 180; a decrease in the percentage would be advantageous for the customer, not the plumber.

Choice (C) is out of scope—we already know the cost is based solely on the items used and a set percentage, not labor. Moreover, it would be to the customer's advantage not to have to pay for labor if a job takes a long time.

Choice (D) is out of scope; the quality of work is not an issue, only the method of pricing is.

Choice (E) is also out of scope; the number of plumbers using the method is not the issue, only its economic advantageousness. Moreover, if anything, this would strengthen the argument, since it implies that customers in the region are satisfied enough with the method not to avoid plumbers who use it.
Intern
Intern
avatar
Joined: 04 Mar 2011
Posts: 13
GMAT ToolKit User Reviews Badge
Re: The fee a certain plumber charges for service is based on  [#permalink]

Show Tags

New post 02 Aug 2014, 16:39
it is either that the question stem is worded wrongly or I do not understand what is meant. in the question posted 'Which of the following statements, if true, would be the best basis for a criticism of "cost-plus" pricing as an economically advantageous method for customers of the plumber's service?, option 'C' should be the correct answer. except it is reworded as '...economically disadvantageous method.... can someone please see reasons with me???
Intern
Intern
User avatar
Joined: 26 Mar 2012
Posts: 4
Concentration: Marketing
GPA: 3.9
Re: The fee a certain plumber charges for service is based on  [#permalink]

Show Tags

New post 01 Nov 2014, 22:56
Can anybody please explain what kind of answer choice is expected to be selected ?
I mean to ask... how will I get to know whether this asks for strengthening, weakening, or evaluate answer choice and in whose favor... plumber or customer ?

The language confused me to select D... assuming that if the plumber is not taking labor charges... then in a way.. it's helping customers.
Where am I going wrong ?


Regards,
Puneet
_________________

Puneet.

Senior Manager
Senior Manager
User avatar
Joined: 31 Mar 2016
Posts: 390
Location: India
Concentration: Operations, Finance
GMAT 1: 670 Q48 V34
GPA: 3.8
WE: Operations (Commercial Banking)
GMAT ToolKit User Premium Member
Re: The fee a certain plumber charges for service is based on a  [#permalink]

Show Tags

New post 06 Jun 2016, 10:33
The stimulus mentions cost plus model works on a fixed percent + cost of all items used to do a work.

We are asked to weaken this argument and this conclusion on how cost plus works is a prime candidate for pre-thinking in that to charge for different tools / items used is a way to charge more than that is required.

Clearly of all the answers only A matches this and will weaken the argument.

A.It is in the economic interest of the plumber to use expensive items, even if their use is not warranted by the circumstances.
Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 3179
Premium Member
Re: The fee a certain plumber charges for service is based on  [#permalink]

Show Tags

New post 21 Dec 2017, 14:32
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
_________________

-
April 2018: New Forum dedicated to Verbal Strategies, Guides, and Resources

GMAT Club Bot
Re: The fee a certain plumber charges for service is based on &nbs [#permalink] 21 Dec 2017, 14:32
Display posts from previous: Sort by

The fee a certain plumber charges for service is based on

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


Copyright

GMAT Club MBA Forum Home| About| Terms and Conditions and Privacy Policy| 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®.