Question

The profits of Biscuits India Ltd soared by 32% in the year 2006 - 07 as compared to year 2005 - 06. By what % did Biscuits India’s Sales increase in 2006 - 07 compared to the previous year? ( ssume: Profit = Sales - Expenses) Decide whether the information given in the two statements is sufficient to solve the problem.
Statement (1): Expenses in 2006 - 07 were Rs 1,400 crores, as compared to Rs 1,220 crores in 2005-06
Statement (2): Sales in 2006 - 07 were Rs 4,300 crores

• A. Any one of the two statements (1) or (2) taken alone, is sufficient to answer the question.
• B. Each of the statement (1) or (2) taken alone, is sufficient to answer the question.
• C. Both statements, taken together, are sufficient to answer the question, but neither of them alone is sufficient
• D. Both the statements together are insufficient to answer the question.

Answer 1

The Correct Option is C

To determine the percentage increase in Biscuits India’s sales in 2006-07 compared to 2005-06, we need to analyze the given statements and information. We begin by setting up the basic profit equation:

Profit = Sales - Expenses

Let:

• P₀₅ be profit in 2005-06
• S₀₅ be sales in 2005-06
• E₀₅ be expenses in 2005-06
• P₀₆ be profit in 2006-07
• S₀₆ be sales in 2006-07
• E₀₆ be expenses in 2006-07

From the problem statement, we have:

• P₀₆ = 1.32 × P₀₅
• P₀₅ = S₀₅ - E₀₅
• P₀₆ = S₀₆ - E₀₆

Analyzing the Statements:

Statement (1):

Expenses in 2006-07 were Rs 1,400 crores, as compared to Rs 1,220 crores in 2005-06.

This gives us:

• E₀₅ = 1220 crores
• E₀₆ = 1400 crores

However, without information on either 2005-06 sales or 2006-07 sales, we cannot compute actual profit or sales change.

Statement (2):

Sales in 2006-07 were Rs 4,300 crores.

We have:

• S₀₆ = 4300 crores

Without 2005-06 sales data or additional information regarding expenses or profit change, this alone is not sufficient.

Combining Statements (1) and (2):

Using both statements:

• From P₀₆ = 1.32 × P₀₅, S₀₆ - E₀₆ = 1.32 × (S₀₅ - E₀₅).
• Plug in known values: 4300 - 1400 = 1.32 × (S₀₅ - 1220).
• Calculate 2900 = 1.32 × (S₀₅ - 1220).
• Solving gives: S₀₅ = (2900 / 1.32) + 1220.
• With S₀₅ calculated, calculate sales increase as:
• % Increase = [(S₀₆ - S₀₅) / S₀₅] × 100.

The combination of both statements allows for complete calculation, thus:

Both statements, taken together, are sufficient to answer the question, but neither of them alone is sufficient.