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Cement Production Cost and Price Data Analysis

XAT 2010 · Quantitative Ability & Data Interpretation · Medium · Data Interpretation

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Passage / data set

Answer the questions based on the data given in table 2

Cost and price data for Portland cement manufactured by Paharpur Cement and Bahsin Cement, for four consecutive quarters, are given in table 2:

Table 2:

QuarterPaharpur Cement Cost (as % of sales revenue)Paharpur Cement Price (Rs./bag)Bahsin Cement Cost (as % of sales revenue)Bahsin Cement Price (Rs./bag)
Oct - Dec 200892.1135294.21438
Jan - Mar 200987.5630491.34440
Apr - Jun 200991.0334089.96430
Jul - Sep 200990.4232290.38434
  • Sales Revenue = Price ×\times Sales Quantity
  • Profit = Sales Revenue – Cost
  • Profit Rate = Profit / Sales Quantity

Question 1 of 3

Profit rate of Paharpur Cement is more than the profit rate of Bahsin Cement in:

  1. A.

    Oct - Dec 2008 and Jan - Mar 2009

  2. B.

    Jan - Mar 2009 and Apr - Jun 2009

  3. C.

    Oct - Dec 2008 only

  4. D.

    Jan - Mar 2009 only

  5. E.

    Apr - Jun 2009 only

Answer

C

Explanation

Profit Rate = (100−Cost%)×Price/100(100 - \text{Cost}\%) \times \text{Price} / 100. Oct-Dec 2008: Paharpur Profit Rate = (100−92.11)%×352=7.89%×352=27.77(100 - 92.11)\% \times 352 = 7.89\% \times 352 = 27.77. Bahsin Profit Rate = (100−94.21)%×438=5.79%×438=25.36(100 - 94.21)\% \times 438 = 5.79\% \times 438 = 25.36. Paharpur > Bahsin. Checking other quarters shows Paharpur < Bahsin. Thus Oct - Dec 2008 only.

Question 2 of 3

If between Jan - Mar 2009 and Apr - Jun 2009 sales of Paharpur Cement increased from 543278 to 698236 and that of Bahsin Cement decreased from 526532 to 499874, then which of the following is true?

  1. A.

    Between Jan - Mar 2009 and Apr - Jun 2009, profit and profit rate of Paharpur Cement increased, whereas profit and profit rate of Bahsin Cement decreased.

  2. B.

    Between Jan - Mar 2009 and Apr - Jun 2009, profit rate of Paharpur Cement increased but its profit decreased, whereas both profit and profit rate of Bahsin Cement increased.

  3. C.

    Between Jan - Mar 2009 and Apr - Jun 2009, both profit and profit rate of Paharpur Cement decreased, whereas profit rate of Bahsin Cement decreased but its profit increased,

  4. D.

    Between Jan - Mar 2009 and Apr - Jun 2009, profit of Paharpur Cement increased but its profit rate decreased, whereas profit rate of Bahsin Cement increased but its profit decreased.

  5. E.

    Between Jan - Mar 2009 and Apr - Jun 2009, profit rate of Paharpur Cement decreased but its profit increased, whereas both profit and profit rate of Bahsin Cement increased.

Answer

E

Explanation

Calculating profit rates and total profits for both companies across the two quarters confirms that Paharpur's profit rate decreased while total profit increased, and Bahsin's both profit and profit rate increased.

Question 3 of 3

If between Apr - Jun 2009 and Jul - Sept 2009 sales of Paharpur Cement increased by 2.25%, its profit increased by

  1. A.

    2.08%

  2. B.

    2.25%

  3. C.

    2.96%

  4. D.

    3.28%

  5. E.

    3.42%

Answer

E

Explanation

Profit(Apr-Jun) = (1−0.9103)×340×x=30.498x(1 - 0.9103) \times 340 \times x = 30.498x. Profit(Jul-Sept) = (1−0.9042)×322×1.0225x=31.541x(1 - 0.9042) \times 322 \times 1.0225x = 31.541x. Percentage increase in profit = 31.541−30.49830.498×100≈3.42%\frac{31.541 - 30.498}{30.498} \times 100 \approx 3.42\%.

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