A clothing store's revenue last may was 6% less

[dw6586]

A clothing store's revenue last may was 6% less than its revenue last april. the store's revenue last may was greater than its expenses last may, and the store's revenue last april was greater than its expenses last april. was the store's gross profit last may less than its gross profit last april?

(1) the store's revenue last may was $2400 less than its revenue last april
(2) the store's expenses last may were 4% less than its expenses last april


Ans: B

i understand why it's not A, but once i figured out how to put the problem in a chart and figure out that (1) was incorrect, i already used up my 2 minutes. and trying to figure out (2) took me way too long and i'm still confused as to why it's sufficient. is there a shorter way to answer this problem?

thanks

[RonPurewal]

A clothing store's revenue last may was 6% less than its revenue last april.

--> translated into algebra:
revenue for april = R
revenue for may = 6% less than R = R - 0.06R = 0.94R

(2) the store's expenses last may were 4% less than its expenses last april

--> translated:
expenses for april = E
expenses for may = 4% less than E = E - 0.04E = 0.96E

so...
gross profit for april = R - E
gross profit for may = 0.94R - 0.96E
if you had 0.94R - 0.94E, then that would already be smaller than R - E (more precisely it would be exactly 94% of that amount). and then you subtract another 0.02E to get this amount, so it's even smaller.
so, for sure,
gross profit for may < gross profit for april

still not super easy, but, at least, not a ton of work.

[dw6586]

ah okay thanks, that makes sense.. the explanations GMAC gives you never show the easy way to do it, they make it look so convoluted.

[RonPurewal]

ah okay thanks, that makes sense.. the explanations GMAC gives you never show the easy way to do it, they make it look so convoluted.

part of gmac's job is to avoid giving away too many insights into an insight-based test.
(this is also why the official guide will almost never show things like backsolving, estimation, or plugging in your own numbers, even though such methods can solve up to half of the problems.)

[rkafc81]

hey Ron

I always get stuck on these types of tricky DS word problems with lots of info etc. and where there are multiple time periods going on for the same quantities.

e.g. revenue in may, revenue in april, expenses in may etc...

i tried using your "organisation for word problems" approach and it took forever, and it also didn't work for me :(

the GMAC answers always show the use of subscripts, however they are time consuming and painful to use. I never know though whether I should be using subscripts in these types of quetsions or if there is another way... can you please provide some guidance as to how to approach these types of DS questions in particular?


thanks

[RonPurewal]

hey Ron

I always get stuck on these types of tricky DS word problems with lots of info etc. and where there are multiple time periods going on for the same quantities.

e.g. revenue in may, revenue in april, expenses in may etc...

i tried using your "organisation for word problems" approach and it took forever, and it also didn't work for me :(

the GMAC answers always show the use of subscripts, however they are time consuming and painful to use. I never know though whether I should be using subscripts in these types of quetsions or if there is another way... can you please provide some guidance as to how to approach these types of DS questions in particular?


thanks

well, i don't have much in the way of "specific guidance" beyond whatever i said in the video.

i will say one thing: if you are trying to memorize ways to organize the problems, then that's ill-advised. instead, just look at what's in the problem, and ask yourself, "how could this best be organized?" then go for it.
it's really not much different from, say, making a spreadsheet. if you had to make a business spreadsheet, i doubt you'd be posting on a forum for guidance - you'd probably just make something, and then maybe revise it if it didn't work out too well.
you should do the same here.
especially on a problem like this one, which is exactly like making a spreadsheet in real life (because it's just month-over-month profit/revenue/cost, rather than some weird exotic quantities).

[rkafc81]

ok thanks Ron! I'll try thinking in terms of "If i was going this in Excel, how would I set it up".

makes sense. I just always mess up the part where I set up an organisational device. need to fix that.

So, do you always use AN organisational device (whatever suits for the question) for these types of questions? or do simply translate into algebra and see what you've got (like the GMAC explanation for this question) ?



thanks!

[jlucero]

I can't speak for Ron, but what I tell students all the time is that charts aren't anything magical and don't answer a question- they're just helpful in organizing information. It looks like Ron's point here is that if you are having trouble organizing the values, think about how you would set it up in a spreadsheet. The advantage to that spreadsheet is that you can clearly see all the variables and use that information to help you to solve the problem. Quite simply, if you know how to attack a problem without a chart- go for it. If you get lost- set up a chart. And if in practice, you find you need a chart for these types of problems- then do so. Everyone's approach will be a little different.

[jasonthomasyee]

My logic was that Revenues in April were +6% vs May, and Expenses in April +4% in May. Since April's advantage in Revenues are greater than its "disadvantage" in Expenses, then April's profits must have been higher than May's.

Can you guys verify if my solution was overly simplified and possibly problematic under another circumstance? Thanks

[RonPurewal]

My logic was that Revenues in April were +6% vs May, and Expenses in April +4% in May. Since April's advantage in Revenues are greater than its "disadvantage" in Expenses, then April's profits must have been higher than May's.

Can you guys verify if my solution was overly simplified and possibly problematic under another circumstance? Thanks

Here's the easiest way I can think to test this:

* Currently, the prompt says 6%, and statement 2 says 4%.

* If you change the figure in statement 2 to 6%"”so that both the prompt and statement 2 now say 6%"”then statement 2 is still sufficient; i.e., gross profit is still smaller.

If your model correctly realizes the above, then I'd say it's fine. On the other hand, if you'd predict that gross profit would remain unchanged if both figures were 6%, then your model is problematic.