MGMAT CAT 3 Q Problem: DS Product of X

[GMATBLACKBELT]

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.



Why is B not suff?

St. 2--> Cp= F + V

F = 5V
Now V= 0.95V

--> Now Cp= 5v+ 0.95V=5.95V

---> % change = 6v-5.95v /6v
---> 0.5/6 x 100=8.3 %

[RonPurewal]

Before addressing the real problem here, I want to point out that 6 - 5.95 is 0.05, not 0.5, and so your calculated percentage should be 0.83%. (It couldn't be 8.3%: if one component is reduced by 5% and the other held constant, then the total must decrease by less than 5%.) But this isn't a valid calculation anyway, as we'll see.

#2 isn't sufficient because, if we take only #2, we know absolutely nothing about what has happened to the fixed cost. You are assuming that the fixed cost has not changed, but you have no justification for that assumption.

Also, remember that (1) and (2) will NEVER contradict each other. If you assume in #2, as you did, that fixed cost hasn't changed, then your assumption contradicts statement (1). That's bad news.

Weirdly enough, the problem here may be a coincidence of language: you might be assuming that 'fixed cost' never changes because it's, well, 'fixed'. You know this isn't true, though, because statement (1) has it changing.

[unique]

Is the answer C?

[Guest]

Ya answer is C.

Thanks I understand very well now!