Question

The head baker at Barry’s Bagels can either purchase flour in-person from the local flour mill, Larry’s Local Mill, or order a shipment of flour from an out-of-state mill, Isadore’s Interstate Mill. The cost of the flour from Isadore’s Interstate Mill is 10 percent less than the cost of the flour from Larry’s Local Mill. Even after shipping and handling fees are added, it is still cheaper to order flour that has to be shipped from Isadore’s than to buy flour locally from Larry’s.

The statements above, if true, best support which of the following assertions?

• A. Production costs at Isadore’s Interstate Mill are 10 percent below those at Larry’s Local Mill.
• B. Buying flour from Isadore’s Interstate Mill will eliminate 10 percent of the local flour mill jobs.
• C. The shipping and handling fees for a batch of flour purchased from Isadore’s Interstate Mill are less than 10 percent of the cost of an identical batch of flour purchased from Larry’s
  Local Mill.
• D. The shipping and handling fees for a batch of flour purchased from Isadore’s Interstate Mill are more than 10 percent of the cost of Isadore’s flour.
• E. Isadore’s Interstate Mill produces flour 10% more efficiently than Larry’s Local Mill does.

Answer 1

The correct option is C The shipping and handling fees for a batch of flour purchased from Isadore’s Interstate Mill are less than 10 percent of the cost of an identical batch of flour purchased from Larry’s

Local Mill.
Assume, cost at Larry’s mill of a given quantity of flour = $\$$ 100
cost at Isadore’s for the same = $\$$90
shipping etc should be less than $\$$10 to stay profitable at Isadore’s, so (c) wins