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# The Tulips electronics manufacturer came out with a

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Senior Manager
Joined: 21 Oct 2013
Posts: 419
The Tulips electronics manufacturer came out with a  [#permalink]

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02 Jun 2014, 05:04
6
14
00:00

Difficulty:

75% (hard)

Question Stats:

60% (02:14) correct 40% (02:16) wrong based on 494 sessions

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The Tulips electronics manufacturer came out with a revamped version of a radio they had once produced. The older model had excellent sound quality. The new version had a more attractive design and was fitted with a display screen. The management department was extremely pleased with the record-high sales figures produced by the new radio although the finance department claimed that the profit earned by the old radio in the same amount of time was higher by two-thirds.

Which of the following inferences is best supported by the statement made above?

A) The screen fitted to the new radios increased its production cost, resulting in a lower profit.
B) Although the new model was cheaper to produce, its marketing proved to be very expensive.
C) The revenues earned by the old model were two-thirds higher than those earned by the new model.
D) Although it had excellent sound quality, the older model cost Tulips less.
E) Even though the sales figures of the new radio were extremely high, those enjoyed by the older model had been even higher.
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Joined: 05 Sep 2010
Posts: 680
Re: The Tulips electronics manufacturer came out with a  [#permalink]

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02 Jun 2014, 05:18
3
D seems best: Although it had excellent sound quality, the older model cost Tulips less.

why others are wrong?

A) The screen fitted to the new radios increased its production cost, resulting in a lower profit.---->all we know from the text is that the "the profit" of "older version" was more than the "profit" of "new version" .this is because of "increased" cost but does that "increased cost" comes from "production cost" or "marketing cost" we are not sure !!
B) Although the new model was cheaper to produce, its marketing proved to be very expensive.---->same reason as in A
C) The revenues earned by the old model were two-thirds higher than those earned by the new model.--->all we know is "sales figures" of "new version" are high
D) Although it had excellent sound quality, the older model cost Tulips less.----->correct
E) Even though the sales figures of the new radio were extremely high, those enjoyed by the older model had been even higher.-->not true
Manager
Joined: 30 Jul 2014
Posts: 130
GPA: 3.72
Re: The Tulips electronics manufacturer came out with a  [#permalink]

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28 Feb 2015, 14:16
I did the same kind of mistake again - confused 'Profit' by 'Revenue'...
D is correct. I opted E.
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Manager
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Re: The Tulips electronics manufacturer came out with a  [#permalink]

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21 Aug 2015, 02:36
I made a mistake- opted E =~ sales should not be equal to the profit.
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Re: The Tulips electronics manufacturer came out with a  [#permalink]

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13 May 2016, 07:53
D it is ... use the concept of profit = sales(revenue) - cost.
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Re: The Tulips electronics manufacturer came out with a  [#permalink]

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11 Jun 2018, 07:13
goodyear2013 wrote:
The Tulips electronics manufacturer came out with a revamped version of a radio they had once produced. The older model had excellent sound quality. The new version had a more attractive design and was fitted with a display screen. The management department was extremely pleased with the record-high sales figures produced by the new radio although the finance department claimed that the profit earned by the old radio in the same amount of time was higher by two-thirds.

Which of the following inferences is best supported by the statement made above?

A) The screen fitted to the new radios increased its production cost, resulting in a lower profit.
B) Although the new model was cheaper to produce, its marketing proved to be very expensive.
C) The revenues earned by the old model were two-thirds higher than those earned by the new model.
D) Although it had excellent sound quality, the older model cost Tulips less.
E) Even though the sales figures of the new radio were extremely high, those enjoyed by the older model had been even higher.

Imo D

A We have lower profit per entity but what if the number of new radios outsell old radios .The profit can be more or less we can know for sure. It is best to leave this choice.
B Also still the new model had record sales so it must have more profit. We do not know for sure.
D Correct it shows that why older model had more share of the profit.
E Also contradictory to the argument .
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Joined: 18 Jan 2009
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Re: The Tulips electronics manufacturer came out with a  [#permalink]

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09 Jul 2018, 23:17
This is slightly confusing. If "cost" is meant to mean cost to consumer (sale price) then D is not correct. But if "cost" is meant to mean all costs associated with the product than D is correct.

In the GMAT should we always assume cost means all costs to sell item? (production costs, maintenance costs, marketing costs ,etc. )
Re: The Tulips electronics manufacturer came out with a &nbs [#permalink] 09 Jul 2018, 23:17
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