In 1999 Company X's gross profit is what percent of

[Borcho]

In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??

[shaji]

If P=Gross Profit & R=Revenue; the question is : What is P/R as a percentage.

Statement 1 gives a definitive answer of 25%

Statement 2 gives a definitive answer of 25%

Therefore each statement is sufficient by themselves, therefore the correct answer is D.

quote="Borcho"]In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??[/quote]

[unique]

Still unclear. Please can you explain more

If P=Gross Profit & R=Revenue; the question is : What is P/R as a percentage.

Statement 1 gives a definitive answer of 25%

Statement 2 gives a definitive answer of 25%

Therefore each statement is sufficient by themselves, therefore the correct answer is D.

quote="Borcho"]In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??

[/quote]

[Borcho]

I am not satisfied with this answer. Manhattan GMAT staff - your take?

[tgt.ivyleague]

Here we have to find P/R.

Now Profit "p" = Revenue "r"- Expenses "e".

1.
Here p = 1/3E
i.e p:e = 1:3 .
So p:e:r(p+e)= 1:3:4
So sufficient

2.
Here e= 3/4r
i.e e:r = 3:4
So p(r-e):e:r= 1:3:4
So sufficient

[dewanak]

Simple concept, profit/loss = Revenues - expenses

The question asked for relationship between revenues and gross profit, so we have to search for these two only. One most important thing is question is asking the percentage relation and not the exact values.

Now first option: profit is 1/3 expenses

lets say expenses is 90, profit becomes 30

with these two we can find the revenues (relation mentioned on top)...which means this statement is SUFFICIENT to answer

Now second option: expense 3/4 revenue

Let say revenue is 40, expense becomes 30

Gross profit becomes 10
again this statement is enough to answer the question

I go with answer choice D

[RonPurewal]

In 1999 Company X's gross profit is what percent of its revenue?

(1) In 1999 Company X's gross profit was 1/3 of its expenses
(2) In 1999 Company X's expenses were 3/4 of its revenue

I went with C. Yet answer is D. Which implies that GMAT assumes expenses = cost of goods sold (vs. operating expenses)??

gross profit is defined as
ALL REVENUES - ALL COSTS.
(this is the only reasonable way in which to define a gross profit -- it's just all the money that you bring in, minus all the money that you put out.)

When you say "revenue minus cost", that does NOT refer to the cost of goods sold. (we don't even know whether company X is selling anything! what if it's a dance club, or a casino, or some other business that doesn't sell goods?)
the word "cost" in "revenue minus cost" refers to ALL costs, of any kind whatsoever.

so:
(statement 1)
Profit = Revenue - Expenses
(1/3)(expenses) = revenue - expenses
(4/3)(expenses) = revenue
therefore, we want (1/3)(expenses) as a percentage of (4/3)(expenses). that's something that we can find, so this statement is sufficient.

(statement 2)
this statement is the same as above --> if expenses = (3/4)(revenue), that's the same as (4/3)(expenses) = revenue. therefore, also sufficient.

(d)

[Milanproda1]

This may seem like a silly question, but in order to verify that I understand the Q: If we solve out the question completely, then the actual percentage that we get is 25% correct?

[RonPurewal]

This may seem like a silly question, but in order to verify that I understand the Q: If we solve out the question completely, then the actual percentage that we get is 25% correct?

yes.