What percent of Firm XYZ's budget will be spent on legal exp

Question

What percent of Firm XYZ's budget will be spent on legal expenses?
GIven:
Production cost : 40%
Overhead expense : 21%
Marketing : 14%
R&D expense :X %
Legal: Q%

(1) If the firm increases its legal expenses by 50%, its total expenses would increase by 5%.

(2) Legal expenses represent less than 1/5 of the total budget.

Bunuel · Accepted Answer

What percent of Firm XYZ's budget will be spent on legal expenses?
GIven:
Production cost : 40%
Overhead expense : 21%
Marketing : 14%
R&D expense :X %
Legal: Q%

(1) If the firm increases its legal expenses by 50%, its total expenses would increase by 5%. So, 50% increase in legal expenses corresponds to 5% increase in total: 0.5Q=0.05*Total --> Q/Total=1/10=10%. Sufficient.

(2) Legal expenses represent less than 1/5 of the total budget --> Q<20%. Clearly insufficient.

Answer: A.

Zenverse · Answer

What percent of Firm XYZ's budget will be spent on legal expenses? GIven:
Production cost : 40%
Overhead expense : 21%
Marketing : 14%
R&D expense :X %
Legal: Q%

X + Q = 25 <--- Call this (#)
 
(1) If the firm increases its legal expenses by 50%, its total expenses would increase by 5%. 
1.5Q + X + 75 = 105
Sufficient with (#)

(2) Legal expenses represent less than 1/5 of the total budget. 
Q < 20
Insufficient with (#)

Therefore (A) is correct.

MeliMeds · Answer

Pardon the ignorance, but doesn't getting to the equation 1.5Q + X + 75 = 105 only get us reduced to still having the two variables X and Q and thus not determining a value for Q? If I follow this equation right through:
Step 2: 1.5Q + X = 105-75
Step 3: 1.5Q + X = 30
Step 4 (the only other move I see possible from here): 1.5Q = 30 - X
Is it that at this point we would be able to substitute for Q or X from original equation Q + X = 25 to solve (if we had to go all the way through and solve the problem as opposed to just having to prove sufficiency?

Bunuel · Answer

Yes, we can solve system of equations (1.5Q = 30 - X and Q + X = 25) to get that Q = 10 and X = 15. Check another solution  HERE .

mvictor · Answer

I actually can't believe that I spent 1 minute 51 seconds on this question...
it is ridiculously easy for a 700 level...

1. it basically tells that 50% of Q is equal to 5% of the budget. therefore, Q must be 10% of the budget. Sufficient. B, C, and E are out.
2. Q < 20%. not sufficient.

A is the answer.

bumpbot · Answer

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What percent of Firm XYZ's budget will be spent on legal exp

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What percent of Firm XYZ's budget will be spent on legal exp

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