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A manufacturing company has fixed overhead costs of C dollars per month. In addition to the overhead, the company incurs...

GMAT Algebra : (Alg) Questions

Source: Prism
Algebra
Linear inequalities in 1 or 2 variables
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A manufacturing company has fixed overhead costs of \(\mathrm{C}\) dollars per month. In addition to the overhead, the company incurs variable production costs equal to \(15\%\) of the total value \(\mathrm{V}\) of goods produced during the month. This month, the company wants its total monthly costs to be at least \(1.8\) times and at most \(2.2\) times the fixed overhead costs. Which of the following inequalities represents all possible values of the total value of goods produced \(\mathrm{V}\), in dollars, that the company can achieve this month to meet this cost goal?

A

\(0.8\mathrm{C} \leq \mathrm{V} \leq 1.2\mathrm{C}\)

B

\(\frac{0.7}{0.15}\mathrm{C} \leq \mathrm{V} \leq \frac{1.1}{0.15}\mathrm{C}\)

C

\(\frac{0.8}{0.15}\mathrm{C} \leq \mathrm{V} \leq \frac{1.2}{0.15}\mathrm{C}\)

D

\(\frac{1.8}{0.15}\mathrm{C} \leq \mathrm{V} \leq \frac{2.2}{0.15}\mathrm{C}\)

Solution

1. TRANSLATE the problem information

  • Given information:
    • Fixed overhead costs: \(\mathrm{C}\) dollars per month
    • Variable production costs: \(\mathrm{15\%}\) of total value \(\mathrm{V}\) produced
    • Constraint: Total costs should be at least \(\mathrm{1.8C}\) and at most \(\mathrm{2.2C}\)
  • What this tells us:
    • Total monthly costs = Fixed costs + Variable costs = \(\mathrm{C + 0.15V}\)
    • We need: \(\mathrm{1.8C \leq Total\ costs \leq 2.2C}\)

2. INFER the approach

  • We need to solve a compound inequality for \(\mathrm{V}\)
  • Strategy: Substitute the total cost expression into the constraint inequality, then isolate \(\mathrm{V}\)

3. SIMPLIFY by setting up and solving the inequality

  • Substitute total costs into the constraint:

\(\mathrm{1.8C \leq C + 0.15V \leq 2.2C}\)

  • Subtract \(\mathrm{C}\) from all parts:

\(\mathrm{1.8C - C \leq 0.15V \leq 2.2C - C}\)

\(\mathrm{0.8C \leq 0.15V \leq 1.2C}\)

  • Divide all parts by \(\mathrm{0.15}\):

\(\mathrm{\frac{0.8C}{0.15} \leq V \leq \frac{1.2C}{0.15}}\)

\(\mathrm{\frac{0.8}{0.15}C \leq V \leq \frac{1.2}{0.15}C}\)

Answer: C



Why Students Usually Falter on This Problem

Most Common Error Path:

Weak TRANSLATE skill: Students misinterpret the constraint and set up the inequality as \(\mathrm{1.8C \leq 0.15V \leq 2.2C}\), completely omitting the fixed cost \(\mathrm{C}\) from the total cost expression.

Their reasoning: "The total costs should be between \(\mathrm{1.8C}\) and \(\mathrm{2.2C}\), and the variable costs are \(\mathrm{0.15V}\), so \(\mathrm{1.8C \leq 0.15V \leq 2.2C}\)." They forget that total costs include both fixed AND variable costs.

This leads them to solve \(\mathrm{1.8C \leq 0.15V \leq 2.2C}\), giving them \(\mathrm{\frac{1.8}{0.15}C \leq V \leq \frac{2.2}{0.15}C}\), which matches Choice D.

Second Most Common Error:

Poor SIMPLIFY execution: Students correctly set up \(\mathrm{1.8C \leq C + 0.15V \leq 2.2C}\) but make algebraic errors when manipulating the inequality, particularly when subtracting \(\mathrm{C}\) or dividing by \(\mathrm{0.15}\).

A common mistake is incorrectly handling the subtraction: instead of getting \(\mathrm{0.8C \leq 0.15V \leq 1.2C}\), they might get confused and think the constraint is just about the variable portion being \(\mathrm{0.8C}\) to \(\mathrm{1.2C}\) directly, leading them to select Choice A.

The Bottom Line:

This problem requires careful attention to what "total costs" actually means - it's the sum of fixed AND variable costs, not just the variable portion. Students who rush through the setup often miss this crucial detail.

Answer Choices Explained
A

\(0.8\mathrm{C} \leq \mathrm{V} \leq 1.2\mathrm{C}\)

B

\(\frac{0.7}{0.15}\mathrm{C} \leq \mathrm{V} \leq \frac{1.1}{0.15}\mathrm{C}\)

C

\(\frac{0.8}{0.15}\mathrm{C} \leq \mathrm{V} \leq \frac{1.2}{0.15}\mathrm{C}\)

D

\(\frac{1.8}{0.15}\mathrm{C} \leq \mathrm{V} \leq \frac{2.2}{0.15}\mathrm{C}\)

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