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# The total cost of producing item X is equal to the sum of

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Intern
Joined: 20 Aug 2008
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The total cost of producing item X is equal to the sum of [#permalink]

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13 Jan 2009, 00:54
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The total cost of producing item X is equal to the sum of item X's fixed cost and variable cost. If the variable cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in January?

(1) The fixed cost of producing item X increased by 13% in January.

(2) Before the changes in January, the fixed cost of producing item X was 5 times the variable cost of producing item X.

A Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient.
B Statement (2) ALONE is sufficient, but statement (1) alone is not sufficient.
C Both statements TOGETHER are sufficient, but NEITHER one ALONE is sufficient.
D EACH statement ALONE is sufficient.
E Statements (1) and (2) TOGETHER are NOT sufficient.
Manager
Status: Stanford GSB
Joined: 02 Jun 2008
Posts: 94

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13 Jan 2009, 11:06
The total cost of producing item X is equal to the sum of item X's fixed cost and variable cost. If the variable cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in January?

(1) The fixed cost of producing item X increased by 13% in January.
We dont know the ratio of fixed and variable cost. Hence NOT SUFFICIENT

(2) Before the changes in January, the fixed cost of producing item X was 5 times the variable cost of producing item X.
From this we dont know the change in fixed cost.

Statement 1 and 2 together solve the problem
Intern
Joined: 20 Aug 2008
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13 Jan 2009, 11:31
sandipchowdhury wrote:
The total cost of producing item X is equal to the sum of item X's fixed cost and variable cost. If the variable cost of producing X decreased by 5% in January, by what percent did the total cost of producing item X change in January?

(1) The fixed cost of producing item X increased by 13% in January.
We dont know the ratio of fixed and variable cost. Hence NOT SUFFICIENT

(2) Before the changes in January, the fixed cost of producing item X was 5 times the variable cost of producing item X.
From this we dont know the change in fixed cost.

Statement 1 and 2 together solve the problem

Yes this is the OA. But I think 2 alone is enough. Why do we need the change in fixed cost. If it is not mentioned, assume there is no change! Had it been a direct problem instead of a DS, stated as " ..Total cost = Fixed Cost + varible cost . If VC is decreased by 5%, what was the % change to the Total cost", we then would have assumed no change in FC???

Please let me know if the reasoning is wrong?
Manager
Status: Stanford GSB
Joined: 02 Jun 2008
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13 Jan 2009, 12:38
Your assumption is logical. However, there is no scope of assumption in DS.

But I agree that the question is slightly confusing.
Re: DS   [#permalink] 13 Jan 2009, 12:38
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