Comprehension
Read the following caselet and choose the best alternative
The BIG and Colourful Company
You are running "BIG and Colourful (BnC)" company that sells books to customers through three retail formats:
a. You can buy books from bookstores,
b. You can buy books from supermarket,
c. You can order books over the Internet (Online).
Your manager has an interesting way of classifying expenses: some of the expenses are classified in terms of size: Big, Small and Medium; and others are classified in terms of the colors, Red, Yellow, Green and Violet. The company has a history of categorizing overall costs into initial costs and additional costs. Additional costs are equal to the sum of Big, Small and Medium expenses. There are two types of margins: contribution (sales minus initial costs) and profit (contribution minus additional costs).
Given below is the data about sales and costs of BnC:
Question: 1
Read the following statements:
Statement I. Online store accounted for 50% of the sales at BnC and the ratio of supermarket sales and book store sales is 1:2.
Statement II. Initial Cost is allocated in the ratio of sales.
If you want to calculate the profit/loss from the different retail formats, then
Read the following statements:
Statement I. Online store accounted for 50% of the sales at BnC and the ratio of supermarket sales and book store sales is 1:2.
Statement II. Initial Cost is allocated in the ratio of sales.
If you want to calculate the profit/loss from the different retail formats, then
Statement I. Online store accounted for 50% of the sales at BnC and the ratio of supermarket sales and book store sales is 1:2.
Statement II. Initial Cost is allocated in the ratio of sales.
If you want to calculate the profit/loss from the different retail formats, then
Show Hint
In data sufficiency problems, first identify exactly what information is missing from the main text. Then, evaluate each statement to see if it provides a piece of the missing puzzle. If neither statement works alone, see if combining them provides all the missing pieces needed to perform the final calculation.
Updated On: Aug 26, 2025
- Statement I alone is sufficient to calculate the profit/loss.
- Statement II alone is sufficient to calculate the profit/loss.
- Both statements I and II are required to calculate the profit/loss.
- Either of the two statements is sufficient to calculate the profit/loss.
- Neither Statement I nor Statement II is sufficient to calculate the profit/loss.
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The Correct Option is C
Solution and Explanation
Step 1: Define the goal and the required components.
The objective is to calculate the profit or loss for each of the three retail formats (Online, Supermarket, Book Store). The formula for profit is:
Profit = Sales - Initial Costs - Additional Costs
Therefore, to find the profit for each format, we need to determine the Sales, Initial Costs, and Additional Costs specific to each format.
Step 2: Determine what can be calculated from the main caselet.
From the tables provided, we can calculate the Additional Costs for each retail format. The total Red, Yellow, Green, and Violet costs are given, and their allocation ratio to each format is also given (based on units consumed).
For example, for the Online format:
Red Cost = 5500 * (200 / 275)
Yellow Cost = 3100 * (52 / 100)
Green Cost = 4800 * (50 / 80)
Violet Cost = 2400 * (50 / 80)
The sum of these gives the total Additional Cost for the Online format. This can be repeated for the other formats. However, the caselet provides no information on how to break down the total Sales (60000) or total Initial Costs (39000) by format.
Step 3: Analyze Statement I alone.
Statement I gives the breakdown of sales:
Total Sales = 60000
Online Sales = 50% of 60000 = 30000
Remaining Sales (Supermarket + Book Store) = 30000
Ratio of Supermarket:Book Store sales is 1:2.
Supermarket Sales = (1/3) * 30000 = 10000
Book Store Sales = (2/3) * 30000 = 20000
With Statement I, we now have the Sales for each format. However, we still do not know how to allocate the Initial Costs (39000) among the three formats. Thus, Statement I alone is not sufficient.
Step 4: Analyze Statement II alone.
Statement II provides a rule for allocating Initial Costs: "in the ratio of sales." This tells us the method, but without knowing the sales breakdown for each format, we cannot apply this rule. For example, we cannot determine what proportion of the 39000 in Initial Costs goes to the Online store without knowing what proportion of the 60000 in Sales comes from the Online store. Thus, Statement II alone is not sufficient.
Step 5: Analyze Statements I and II together.
From Statement I, we get the sales breakdown: Online (30000), Supermarket (10000), Book Store (20000). The ratio of sales is 3:1:2.
From Statement II, we use this sales ratio to allocate the Initial Costs.
Initial Cost (Online) = (3/6) * 39000 = 19500
Initial Cost (Supermarket) = (1/6) * 39000 = 6500
Initial Cost (Book Store) = (2/6) * 39000 = 13000
Now we have all the necessary components for each format: Sales (from I), Initial Costs (from I and II), and Additional Costs (from the main caselet). We can calculate the profit for each format.
Therefore: Both statements I and II are required to calculate the profit/loss. \[ \boxed{\text{(C)}} \]
The objective is to calculate the profit or loss for each of the three retail formats (Online, Supermarket, Book Store). The formula for profit is:
Profit = Sales - Initial Costs - Additional Costs
Therefore, to find the profit for each format, we need to determine the Sales, Initial Costs, and Additional Costs specific to each format.
Step 2: Determine what can be calculated from the main caselet.
From the tables provided, we can calculate the Additional Costs for each retail format. The total Red, Yellow, Green, and Violet costs are given, and their allocation ratio to each format is also given (based on units consumed).
For example, for the Online format:
Red Cost = 5500 * (200 / 275)
Yellow Cost = 3100 * (52 / 100)
Green Cost = 4800 * (50 / 80)
Violet Cost = 2400 * (50 / 80)
The sum of these gives the total Additional Cost for the Online format. This can be repeated for the other formats. However, the caselet provides no information on how to break down the total Sales (60000) or total Initial Costs (39000) by format.
Step 3: Analyze Statement I alone.
Statement I gives the breakdown of sales:
Total Sales = 60000
Online Sales = 50% of 60000 = 30000
Remaining Sales (Supermarket + Book Store) = 30000
Ratio of Supermarket:Book Store sales is 1:2.
Supermarket Sales = (1/3) * 30000 = 10000
Book Store Sales = (2/3) * 30000 = 20000
With Statement I, we now have the Sales for each format. However, we still do not know how to allocate the Initial Costs (39000) among the three formats. Thus, Statement I alone is not sufficient.
Step 4: Analyze Statement II alone.
Statement II provides a rule for allocating Initial Costs: "in the ratio of sales." This tells us the method, but without knowing the sales breakdown for each format, we cannot apply this rule. For example, we cannot determine what proportion of the 39000 in Initial Costs goes to the Online store without knowing what proportion of the 60000 in Sales comes from the Online store. Thus, Statement II alone is not sufficient.
Step 5: Analyze Statements I and II together.
From Statement I, we get the sales breakdown: Online (30000), Supermarket (10000), Book Store (20000). The ratio of sales is 3:1:2.
From Statement II, we use this sales ratio to allocate the Initial Costs.
Initial Cost (Online) = (3/6) * 39000 = 19500
Initial Cost (Supermarket) = (1/6) * 39000 = 6500
Initial Cost (Book Store) = (2/6) * 39000 = 13000
Now we have all the necessary components for each format: Sales (from I), Initial Costs (from I and II), and Additional Costs (from the main caselet). We can calculate the profit for each format.
Therefore: Both statements I and II are required to calculate the profit/loss. \[ \boxed{\text{(C)}} \]
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Question: 2
What is the profit/loss from "online" sales? (Use data from previous question if needed)
What is the profit/loss from "online" sales? (Use data from previous question if needed)
Show Hint
When questions are linked, always carry forward the assumptions and data from the preceding question. Here, using the sales and cost allocation rules from Q44 is essential for the calculation.
Updated On: Aug 26, 2025
- 0
- -310
- +20
- +388
- Cannot be determined from given information
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The Correct Option is D
Solution and Explanation
To find the profit from online sales, we must calculate the Sales, Initial Costs, and Additional Costs for the Online format. We will use the information from the caselet and both statements from the previous question.
Step 1: Calculate Online Sales.
Total Sales = 60,000.
Statement I says Online sales are 50% of the total.
Online Sales = 0.50 × 60,000 = 30,000.
Step 2: Calculate Online Initial Costs.
Total Initial Costs = 39,000.
Statement II says Initial Costs are allocated in the ratio of sales.
From Statement I, the sales ratio for Supermarket to Book Store is 1:2 on the remaining 50% of sales.
Sales Ratio (Online : Supermarket : Book Store) = 50% : (1/3 of 50%) : (2/3 of 50%) = 50 : 16.67 : 33.33, which simplifies to a ratio of 3:1:2.
Online's share of Initial Costs = (3 / (3+1+2)) × 39,000 = (3/6) × 39,000 = 19,500.
Step 3: Calculate Online Additional Costs.
Additional costs for the Online format are the sum of its allocated Red, Yellow, Green, and Violet costs. The allocation is based on the ratio of units consumed.
Red Cost (Online) = (Online Red Units / Total Red Units) × Total Red Cost = (200 / 275) × 5,500 = 4,000.
Yellow Cost (Online) = (Online Yellow Units / Total Yellow Units) × Total Yellow Cost = (52 / 100) × 3,100 = 1,612.
Green Cost (Online) = (Online Green Units / Total Green Units) × Total Green Cost = (50 / 80) × 4,800 = 3,000.
Violet Cost (Online) = (Online Violet Units / Total Violet Units) × Total Violet Cost = (50 / 80) × 2,400 = 1,500.
Total Online Additional Cost = 4,000 + 1,612 + 3,000 + 1,500 = 10,112.
Step 4: Calculate Online Profit/Loss.
Profit = Sales - Initial Costs - Additional Costs Online Profit = 30,000 - 19,500 - 10,112 = 10,500 - 10,112 = 388. Therefore: The profit from online sales is +388. \[ \boxed{\text{+388}} \]
Step 1: Calculate Online Sales.
Total Sales = 60,000.
Statement I says Online sales are 50% of the total.
Online Sales = 0.50 × 60,000 = 30,000.
Step 2: Calculate Online Initial Costs.
Total Initial Costs = 39,000.
Statement II says Initial Costs are allocated in the ratio of sales.
From Statement I, the sales ratio for Supermarket to Book Store is 1:2 on the remaining 50% of sales.
Sales Ratio (Online : Supermarket : Book Store) = 50% : (1/3 of 50%) : (2/3 of 50%) = 50 : 16.67 : 33.33, which simplifies to a ratio of 3:1:2.
Online's share of Initial Costs = (3 / (3+1+2)) × 39,000 = (3/6) × 39,000 = 19,500.
Step 3: Calculate Online Additional Costs.
Additional costs for the Online format are the sum of its allocated Red, Yellow, Green, and Violet costs. The allocation is based on the ratio of units consumed.
Red Cost (Online) = (Online Red Units / Total Red Units) × Total Red Cost = (200 / 275) × 5,500 = 4,000.
Yellow Cost (Online) = (Online Yellow Units / Total Yellow Units) × Total Yellow Cost = (52 / 100) × 3,100 = 1,612.
Green Cost (Online) = (Online Green Units / Total Green Units) × Total Green Cost = (50 / 80) × 4,800 = 3,000.
Violet Cost (Online) = (Online Violet Units / Total Violet Units) × Total Violet Cost = (50 / 80) × 2,400 = 1,500.
Total Online Additional Cost = 4,000 + 1,612 + 3,000 + 1,500 = 10,112.
Step 4: Calculate Online Profit/Loss.
Profit = Sales - Initial Costs - Additional Costs Online Profit = 30,000 - 19,500 - 10,112 = 10,500 - 10,112 = 388. Therefore: The profit from online sales is +388. \[ \boxed{\text{+388}} \]
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Question: 3
Which retail format is least profit making for BnC?
Which retail format is least profit making for BnC?
Show Hint
Create a clear table to track your calculations for each category (Sales, Initial Costs, Additional Costs, Profit) across all items (Online, Supermarket, Book Store). This organization prevents errors and makes comparison easy.
Updated On: Aug 26, 2025
- Online
- Supermarket
- Book Store
- All formats are loss making. E. All formats are profit making.
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The Correct Option is B
Solution and Explanation
To answer this, we need to calculate the profit for all three formats and compare them. We have already calculated the profit for Online (+388).
Step 1: Calculate Supermarket Profit.
Sales: (1/6) × 60,000 = 10,000.
Initial Costs: (1/6) × 39,000 = 6,500.
Additional Costs:
Red: (65 / 275) × 5,500 = 1,300.
Yellow: (20 / 100) × 3,100 = 620.
Green: (21 / 80) × 4,800 = 1,260.
Violet: (21 / 80) × 2,400 = 630.
Total Additional: 1,300 + 620 + 1,260 + 630 = 3,810.
Profit: 10,000 - 6,500 - 3,810 = 3,500 - 3,810 = -310.
Step 2: Calculate Book Store Profit.
Sales: (2/6) × 60,000 = 20,000.
Initial Costs: (2/6) × 39,000 = 13,000.
Additional Costs:
Red: (10 / 275) × 5,500 = 200.
Yellow: (30 / 100) × 3,100 = 930.
Green: (9 / 80) × 4,800 = 540.
Violet: (9 / 80) × 2,400 = 270.
Total Additional: 200 + 930 + 540 + 270 = 1,940.
Profit: 20,000 - 13,000 - 1,940 = 7,000 - 1,940 = 5,060.
Step 3: Compare the profits.
Online Profit = +388
Supermarket Profit = -310
Book Store Profit = +5,060
The lowest value is -310, which corresponds to the Supermarket format.
Therefore: The Supermarket is the least profit-making format. \[ \boxed{\text{Supermarket}} \]
Step 1: Calculate Supermarket Profit.
Sales: (1/6) × 60,000 = 10,000.
Initial Costs: (1/6) × 39,000 = 6,500.
Additional Costs:
Red: (65 / 275) × 5,500 = 1,300.
Yellow: (20 / 100) × 3,100 = 620.
Green: (21 / 80) × 4,800 = 1,260.
Violet: (21 / 80) × 2,400 = 630.
Total Additional: 1,300 + 620 + 1,260 + 630 = 3,810.
Profit: 10,000 - 6,500 - 3,810 = 3,500 - 3,810 = -310.
Step 2: Calculate Book Store Profit.
Sales: (2/6) × 60,000 = 20,000.
Initial Costs: (2/6) × 39,000 = 13,000.
Additional Costs:
Red: (10 / 275) × 5,500 = 200.
Yellow: (30 / 100) × 3,100 = 930.
Green: (9 / 80) × 4,800 = 540.
Violet: (9 / 80) × 2,400 = 270.
Total Additional: 200 + 930 + 540 + 270 = 1,940.
Profit: 20,000 - 13,000 - 1,940 = 7,000 - 1,940 = 5,060.
Step 3: Compare the profits.
Online Profit = +388
Supermarket Profit = -310
Book Store Profit = +5,060
The lowest value is -310, which corresponds to the Supermarket format.
Therefore: The Supermarket is the least profit-making format. \[ \boxed{\text{Supermarket}} \]
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Question: 4
Which retail format gives the highest profit for BnC?
Which retail format gives the highest profit for BnC?
Show Hint
Once a full set of comparative data is calculated for one question (like in Q46), subsequent questions (like Q47) can often be answered immediately just by re-examining that data, saving significant time.
Updated On: Aug 26, 2025
- BookStore
- Supermarket
- Online
- All are equally profitable.
- Cannot be determined from given information.
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The Correct Option is A
Solution and Explanation
Step 1: Refer to the profit calculations from the previous question (Q46).
Based on the detailed calculations performed to find the least profitable format, we have the final profit/loss for each retail channel:
Online Profit = +388
Supermarket Profit = -310
Book Store Profit = +5,060
Step 2: Compare the profit figures.
By comparing the three values, it is clear that 5,060 is the highest profit. This figure corresponds to the Book Store retail format.
Therefore: The BookStore format gives the highest profit. \[ \boxed{\text{BookStore}} \]
Based on the detailed calculations performed to find the least profitable format, we have the final profit/loss for each retail channel:
Online Profit = +388
Supermarket Profit = -310
Book Store Profit = +5,060
Step 2: Compare the profit figures.
By comparing the three values, it is clear that 5,060 is the highest profit. This figure corresponds to the Book Store retail format.
Therefore: The BookStore format gives the highest profit. \[ \boxed{\text{BookStore}} \]
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