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09 Sep 2022 Profit & Loss

Company Writewell produces quality ball pens. If on average 4% of the produced pens are always defective so are rejected before packing. Company promises to deliver 8400 pens to its wholesaler at Rs. 8 each. It estimates the overall profit on all the manufactured pens to be 25%. What is the manufacturing cost of each pen?

OPtion

1) Rs. 6.40
2) Rs. 7.07
3) Rs. 6.84
4) Rs. 5.63
5) Rs. 6.14
6) Rs. 5.98
7) Rs. 7.14
8) Rs. 6.70
9) Rs. 7.84
10) None of these

Solution

As 4% pens are defective,so company is able to deliver only 96% of manufactured pens, hence to deliver 8400 pens company has to to produce 8400*(100/96) = 8750 pens
Total income by selling 8400 pens @ Rs. 8 pen pen = 8400 x 8 = 67200
As income 67200 is 125% of the manufacturing cost of total 8750 pens .'. cost of 8750 pens = 67200 x 100/125 = 53760
Therefore, cost of each pen = 53760/8750 = 6.144
Correct Option 5)

Correct Option: 5 Best Solution (2)

G.S.Kantharao   2 years AGO

Damage are 4%
Supplied =8400=96% of Production.
Total Production =8400*100/96=8750
S.P of 8400=8400*8=₹67200
Profit on overall=25%
Manufacturer cost =67200*100/125=₹53760
Cost of each pen =53760/8750=₹6.14
My option is 5👈

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RAMADURAI NATESAN   2 years AGO

Defective = 4%. Good= 96%. Sale proceed = 8400*8 = 67200
Total pens =8400/0.96 = 8750. 1.25c = 67200 .c= 53760.
cost per pen = 53760/8750 = 6.14

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