I've heard that you're trying to establish sales goals for your team.

Question

The following email is from the accountant of a certain television store to the store's head of sales.

I've heard that you're trying to establish sales goals for your team. I thought this information could be useful. As I'm sure you know, our televisions are sold at a price of $250. We purchase the televisions from the manufacturer at a price of $100 and pay shipping costs of $50 per television. Our rent is a flat rate of $140,000 per year. Hopefully, that will help.

Bismuth83 · Answer

1. We have to  find which statements can be inferred using the information given .

-  In 2001, the profit from television sales exceeded the cost of the rent.  The profit per tv is $250 - $100 - $50 = $100. In 2001 the total profit was $100  *  1000 = $100,000. However, this is less than the rent: $140,000.   So, this statement cannot be inferred.

-  More televisions were sold in 2004 than were sold in the next two years combined.  2200 tvs were sold in 2004 and 1200 + 900 = 2100 tvs were sold in the next two years.   So, this statement can be inferred.

-  The store makes a gross profit of $100 per television.  Profit per tv = Selling price - Manufacturing price - Shipping cost = $250 - $100 - $50 = $100.   So, this statement can be inferred.

2. This question asks us to  figure out which statements are true or false .

-  The profit made from television sales failed to exceed the cost of rent in less than 1/4 of the years shown.  Exceeding the cost rent means that at least  \frac{140000}{100} = 1400  tvs were sold. 2001, 2005, 2006, and 2010 clearly are beneath 1400. 4/10 is larger than 1/4.   So, this statement is false.

-  The number of televisions sold in 2003 increased by exactly 1/6 from the previous year.  The number of tvs went from 1500 to 1800. That means the increase was  \frac{1800 - 1500}{1500} = \frac{3}{15} = \frac{1}{5} 
eq \frac{1}{6} .   So, this statement is false.

-  The total of the shipping cost and manufacturer's price of a television is exactly 2/5 of the price at which the store sells the television.  This is equal to:  \frac{50 + 100}{250} = \frac{15}{25} = \frac{3}{5} 
eq \frac{2}{5} .   So, this statement is false.

EshaFatim · Answer

Hi  Bismuth83 ,

In Q1, it asks whether the information can be  "inferred" . If I understand it correctly, it asks if we have enough information to verify the statements in question regardless they're correct or incorrect, right? However, the answer shouldn't matter and we need to select "yes" in case enough information is available to verify the given statement or "no" in case of the other.

But from your solution, it seems that the question is asking to input "yes" when the statement is true or "no" when the statement is false. Kindly shed some light. TIA.

DrAnkita91 · Answer

for question 1.. third one:
profit is 100 is the answer. but should not we include rent also???

Bismuth83 · Answer

These kind of questions are confusing since you can think of it in two ways:

- This statement is false, and since I could deduce whether it's true/false, then it's inferable.
 - This statement is false, and since the text gives me a different deduction, then it's not inferable.

Both ways are technically correct, however I've seen that problems go to the latter answer. It's a little weird but I hope that answered your question!

Bismuth83 · Answer

Rent logically should be included, however this is   gross profit  . Gross profit only includes the cost of having the product ready (producing, shipping, etc.) and the price. So, we don't include other costs, such as rent.

I hope that helped you!

sommertag0321 · Answer

Gross Profit ≠ Net Profit: Gross profit only accounts for direct production costs, whereas net profit includes all expenses (e.g., rent, salaries, taxes, interest).

I've heard that you're trying to establish sales goals for your team.

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My Rewards

Yes	No
		In 2001, the profit from television sales exceeded the cost of the rent.
		More televisions were sold in 2004 than were sold in the next two years combined.
		The store makes a gross profit of $100 per television.

True	False
		The profit made from television sales failed to exceed the cost of rent in less than 1/4 of the years shown.
		The number of televisions sold in 2003 increased by exactly 1/6 from the previous year.
		The total of the shipping cost and manufacturer's price of a television is exactly 2/5 of the price at which the store sells the television.