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In 1999 Company X's gross profit is what percent of

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Borcho
 Post subject: In 1999 Company X's gross profit is what percent of
 Post Posted: Tue Aug 07, 2007 11:28 pm 
In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??
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shaji
 Post subject: Re: GMATPrep Test 2 Q33
 Post Posted: Wed Aug 08, 2007 7:53 am 
If P=Gross Profit & R=Revenue; the question is : What is P/R as a percentage.

Statement 1 gives a definitive answer of 25%

Statement 2 gives a definitive answer of 25%

Therefore each statement is sufficient by themselves, therefore the correct answer is D.

quote="Borcho"]In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??[/quote]
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unique
 Post subject: Re: GMATPrep Test 2 Q33
 Post Posted: Wed Aug 08, 2007 11:17 am 
Still unclear. Please can you explain more

shaji wrote:
If P=Gross Profit & R=Revenue; the question is : What is P/R as a percentage.

Statement 1 gives a definitive answer of 25%

Statement 2 gives a definitive answer of 25%

Therefore each statement is sufficient by themselves, therefore the correct answer is D.

quote="Borcho"]In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??
[/quote]
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Borcho
 Post subject: unclear
 Post Posted: Wed Aug 08, 2007 2:00 pm 
I am not satisfied with this answer. Manhattan GMAT staff - your take?
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tgt.ivyleague
 Post subject: Re: In 1999 Company X's gross profit is what percent of
 Post Posted: Fri Jul 16, 2010 6:12 pm 
Offline
Students


Posts: 20
Here we have to find P/R.

Now Profit "p" = Revenue "r"- Expenses "e".

1.
Here p = 1/3E
i.e p:e = 1:3 .
So p:e:r(p+e)= 1:3:4
So sufficient

2.
Here e= 3/4r
i.e e:r = 3:4
So p(r-e):e:r= 1:3:4
So sufficient
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dewanak
 Post subject: Re: In 1999 Company X's gross profit is what percent of
 Post Posted: Mon Jul 19, 2010 5:02 am 
Offline
Students


Posts: 16
Simple concept, profit/loss = Revenues - expenses

The question asked for relationship between revenues and gross profit, so we have to search for these two only. One most important thing is question is asking the percentage relation and not the exact values.

Now first option: profit is 1/3 expenses

lets say expenses is 90, profit becomes 30

with these two we can find the revenues (relation mentioned on top)...which means this statement is SUFFICIENT to answer

Now second option: expense 3/4 revenue

Let say revenue is 40, expense becomes 30

Gross profit becomes 10
again this statement is enough to answer the question

I go with answer choice D
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RonPurewal
 Post subject: Re: In 1999 Company X's gross profit is what percent of
 Post Posted: Thu Aug 05, 2010 6:58 am 
Offline
ManhattanGMAT Staff


Posts: 7146
Borcho wrote:
In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??


gross profit is defined as
ALL REVENUES - ALL COSTS.
(this is the only reasonable way in which to define a gross profit -- it's just all the money that you bring in, minus all the money that you put out.)

When you say "revenue minus cost", that does NOT refer to the cost of goods sold. (we don't even know whether company X is selling anything! what if it's a dance club, or a casino, or some other business that doesn't sell goods?)
the word "cost" in "revenue minus cost" refers to ALL costs, of any kind whatsoever.

so:
(statement 1)
Profit = Revenue - Expenses
(1/3)(expenses) = revenue - expenses
(4/3)(expenses) = revenue
therefore, we want (1/3)(expenses) as a percentage of (4/3)(expenses). that's something that we can find, so this statement is sufficient.

(statement 2)
this statement is the same as above --> if expenses = (3/4)(revenue), that's the same as (4/3)(expenses) = revenue. therefore, also sufficient.

(d)
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Milanproda
 Post subject: Re: In 1999 Company X's gross profit is what percent of
 Post Posted: Wed Sep 21, 2011 10:33 am 
Offline
Course Students


Posts: 48
This may seem like a silly question, but in order to verify that I understand the Q: If we solve out the question completely, then the actual percentage that we get is 25% correct?
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RonPurewal
 Post subject: Re: In 1999 Company X's gross profit is what percent of
 Post Posted: Thu Oct 06, 2011 5:40 am 
Offline
ManhattanGMAT Staff


Posts: 7146
Milanproda wrote:
This may seem like a silly question, but in order to verify that I understand the Q: If we solve out the question completely, then the actual percentage that we get is 25% correct?


yes.
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