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Posted on
12
Feb 2019

Profit & Loss Problem Form

The profit and loss problem form that this problem fits into is one that has strong DSM’s into mathematics. Here we are tempted to do the math in part because that’s so easy. It’s so available to us.

This is characteristic of a mid-level arithmetic problem where there’s some shifts and shimmies but overall it’s a fairly straightforward problem that utilizes no more than the four basic operations. So on the one hand this profit and loss problem is pre-algebra or even sort of grade school math. On the other this makes the solution path much more elusive.

Solving the Problem Using Math

So of course we can follow the math. We can add up all the costs, five thousand plus two dollars, times twenty thousand. Then contrast that with the revenue that comes in which is 12×20,000. But then we’re left with the ugly division problem that brings us to the profit per t-shirt. This is where the GMAT sticks us.

Instead of handling this in aggregate it’s strongly preferable to handle it with a higher level solution path. Let’s take a look at a few:

Higher Level Solution Path: Distribution

One way to do this is to distribute the fixed cost over the cost per t-shirt. This is actually a lot easier than it seems. Twenty thousand t-shirts, five thousand dollars, five over twenty is one-quarter.

Therefore, it costs one-quarter per t-shirt in addition to the two dollars in variable cost. So twelve minus two is equal to ten dollars, minus one quarter is equal to nine dollars and seventy-five cents.

Higher Level Solution Path: Graphical Equalization

We can also use a graphic equalization method in order to get to the same conclusion. If the numbers were more complicated, understanding that that shift is one-quarter down. That is the fixed cost is one-quarter down.

Then we know we’re looking for something that ends in a seventy-five cents. That allows us to eliminate all the answer choices that don’t end in 0.75. Then we can use scale to determine that 9.75 is the correct answer.

Practice Problems

There are more complicated versions of this problem form. In particular, I’d encourage you to explore being told that the t-shirt company is breaking even. Then determining the amount of variable costs or fixed cost that’s there or even the production run. Similarly, you can be given a target profit or loss, the break-even just being the zero, so it’s a bit easier and have to reverse engineer the relationships.

Once again, this doesn’t have to be done algebraically. As you begin to appreciate the subtlety of the ratio between costs production run and total P&L all of these problems should be simplified and should be very straightforward.

Continue your GMAT practice with the Wedding Guest GMAT problem.

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Posted on
12
Feb 2019

Six Things That GMAT Preppers Get Wrong

I’m Mike Diamond Head Instructor for Apex GMAT, here to talk about the top six things GMAT preppers get wrong.

1. Thinking that a correct answer means you’re done with the problem.

When you arrive at a correct answer, that should mark the beginning of your preparation, not the end of it. There are almost always better solution paths that are more time efficient. They work better with the way your brain engages the problem. Or they will add understanding either to the content or more importantly to the underlying structure of the examination.

So, when you arrive at a correct answer look for alternative solution paths, and for shortcuts. Give yourself the latitude to explore. Moreover, try to identify what permitted you get to get the problem correct in the first place. A lot of times people focus much more on the problems they get wrong; on what they’re doing wrong than on what they’re doing right. And what you’re doing right can often inform those problems where you are struggling. So remember, once you arrive at the correct answer, that’s your starting point.

2. Overusing practice tests.

Practice exams are a crucial part of GMAT preparation, but they’re often misused and overused. Most people use a practice exam to see how they’re doing. But being focused on your score is absolutely the wrong way to approach the GMAT.

Rather, you want to be focused on your process and if your process is tight, if your process is correct. Then the score is going to take care of itself. Practice tests are best used for a number of reasons, none of which have to do with your score.

They can be used to calibrate your timing decisions. They can be used to identify weak points in your conceptual understanding. Finally, they can be used to identify where you DSM, default solving mechanism, back into old time consuming and unconstructive solution pathways. So, the next time you have an urge to do a test remember that this is going to rob you of two to three hours of valuable prep time. When you’re doing a practice test, you’re not learning, you’re doing.

3. Caring about your score.

I know it’s counter-intuitive, you want that 700-plus score. It’s all you think about; it haunts your dreams. And yet caring about your score is the quickest way to a test anxiety problem and it’s actually entirely unconstructive. Rather, you need to focus entirely on your process and let the score handle itself.

Imagine you’re running a race and you’re running as fast as you can. Whether you’re a super fit marathon runner or a couch potato, you can only run as fast as you can. And the time on that race is going to reflect that. So don’t sweat the score, sweat your fitness! Understand what things you can do to improve your GMAT fitness and the score will take care of itself.

4. Studying under a time constraint.

Time trials are really important as you mature in your GMAT progress. But at the start, you want to focus on the mastery of skills in an un-timed environment. Only once you’ve achieved mastery try to do them ever more quickly.

By focusing on the time before you have the underlying process conquered you end up rushing yourself in a way that exacerbates your mistakes rather than allows you to correct them. So as you’re prepping, focus on total mastery and understanding first and then begin putting them under time pressure.

5. Low-yield self-prep.

Most people spend entirely too much time preparing from the GMAT. They do so because they’re not getting enough out of their prep time.

Does this sound familiar? Okay, I’m going to do a group of 10 questions, maybe on a timer for 20 minutes. Afterwards I’m going to look in the back of the book. When I get the problem right I’m going to say, “yeah, I never have to deal with this problem again.” When I get it wrong in going to go a little bit further and normally I’m going to find something that I knew but I sort of forgot. I’ll say, “You know what I won’t forget that, I’m going to get that right next time.”

But it doesn’t happen that way does it? That’s a very low yielding strategy. Instead, you need to become responsible and accountable for your learning and Apex shows you the way to do so by not just being reactive to problems but proactively creating problems of your own.

6. Doing the math.

We have a saying around here and you may have heard it on some of our materials or online videos. If you’re doing math, then you’re doing something wrong. Most of the GMAT quantitative section requires little to no processing and if you’re scribbling tons of stuff on paper it means you’re missing the bigger picture. So remember, if you’re doing math there’s always a better way!

Enjoyed “Six things that GMAT preppers get wrong?”, find more videos here.

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