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I can not manage to solve this problem. Any suggestions on how I can solve it.

If in 2006 Pharmacom spent the same dollar amount on administration (administration outgoings) as in 2005, but the total outgoings increased by ten percent, approximately what fraction of the total outgoings in 2006 would administration outgoings represent?

Ans a) 1/2 b) 1/3 c) 1/4 d) 1/10 e) 1/20 Ans(d)

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1 Answer

up vote 1 down vote accepted

Just a hint.

Call $a_n$ the administrative expenses in year $n$, $t_n$ the total expenses.

From the question it is given that: $$1.1t_{2005}=t_{2006}$$ And that:$$a_{2005}=a_{2006}$$ Ergo: $$\frac{a_{2005}}{1.1t_{2005}}=\frac{a_{2006}}{t_{2006}}$$ We can read off $\displaystyle\frac{a_{2005}}{t_{2005}}$ from the pie chart.

The question is: find $\displaystyle\frac{a_{2006}}{t_{2006}}$.

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Thanks that makes sense. Quick question. The administrative portion would be the green part (Other R&d) in the bar graph right ? –  MistyD Jul 28 '12 at 16:39
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@MistyD: I think my answer quite clearly states that we can read off $a_{2005}/t_{2005}$ from the pie chart. –  akkkk Jul 28 '12 at 16:44
    
The questions asks you to approximate, and looking at the multiple choice options, it appears that a rough estimation of the administration percentage will suffice. Then the question tells you that the total outgoings rises 10%, so you must recognize that the administration percentage of outgoings in 2005, which you estimated, will be lower in 2006. –  Eric Thoma Jul 28 '12 at 16:47
    
@EricThoma: I agree, but I think wild guesses are better taught via a more direct medium. –  akkkk Jul 28 '12 at 16:50
    
@Thanks for making it so clear. I get it now. This could also be solved orally. –  MistyD Jul 28 '12 at 17:14
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