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03 Oct 2019, 09:31
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Difficulty:
55%
(hard)
Question Stats:
66% (02:54) correct
34%
(02:58)
wrong
based on 106
sessions
History
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Time
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Not Attempted Yet
A factory producing machine parts calculated that on average about 10% of the manufactured parts are defective and must be rejected before shipment to buyer. The factory promised to supply 7200 parts priced at $10 for each part. It estimated that the overall profit on all the manufactured parts will be 25%. How much did it cost the factory to produce one part?
(A) $5.60
(B) $6.00
(C) $7.20
(D) $8.00
(E) $9.75
(A) $5.60
(B) $6.00
(C) $7.20
(D) $8.00
(E) $9.75
Updated on: 15 Jul 2020, 10:47
Originally posted by BrushMyQuant on 05 Oct 2019, 03:58.
Last edited by BrushMyQuant on 15 Jul 2020, 10:47, edited 1 time in total.
Last edited by BrushMyQuant on 15 Jul 2020, 10:47, edited 1 time in total.
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Let's first figure out the number of parts we need to manufacture.
Since 10% of the manufactured parts are rejected that means that only 90% of the manufactured parts are shipped.
Let total number of parts produced is x
90% * x = 7200 (parts to be shipped)
x = 7200/0.9 = 8000
Selling Price, SP = 7200 * $10 = $72,000
Cost Price = CP
Profit % = (SP-CP)/CP * 100
25 = (72000 - CP)/CP * 100
72000-CP = 0.25CP
CP = 72000/1.25 = $ 57,600
CP = Per Unit Cost * 8000 = $ 57,600
Per Unit Cost = 57,600 / 8000 = $ 7.2
So, Answer is C
Hope it helps!
Since 10% of the manufactured parts are rejected that means that only 90% of the manufactured parts are shipped.
Let total number of parts produced is x
90% * x = 7200 (parts to be shipped)
x = 7200/0.9 = 8000
Selling Price, SP = 7200 * $10 = $72,000
Cost Price = CP
Profit % = (SP-CP)/CP * 100
25 = (72000 - CP)/CP * 100
72000-CP = 0.25CP
CP = 72000/1.25 = $ 57,600
CP = Per Unit Cost * 8000 = $ 57,600
Per Unit Cost = 57,600 / 8000 = $ 7.2
So, Answer is C
Hope it helps!
16 Oct 2019, 03:59
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BrushMyQuant
Hovkial
A factory producing machine parts calculated that on average about 10% of the manufactured parts are defective and must be rejected before shipment to buyer. The factory promised to supply 7200 parts priced at $10 for each part. It estimated that the overall profit on all the manufactured parts will be 25%. How much did it cost the factory to produce one part?
(A) $5.60
(B) $6.00
(C) $7.20
(D) $8.00
(E) $9.75
(A) $5.60
(B) $6.00
(C) $7.20
(D) $8.00
(E) $9.75
Let's first figure out the number of parts we need to manufacture.
Since 10% of the manufactured parts are rejected that means that only 90% of the manufactured parts are shipped.
Let total number of parts produced is x
90% * x = 7200 (parts to be shipped)
x = 7200/0.9 = 8000
Selling Price, SP = 7200 * $10 = $72,000
Cost Price = CP
Profit % = (SP-CP)/CP * 100
25 = (72000 - CP)/CP * 100
72000-CP = 0.25CP
CP = 72000/1.25 = $ 57,600
CP = Per Unit Cost * 8000 = $ 57,600
Per Unit Cost = 57,600 / 8000 = $ 7.2
So, Answer is C
Hope it helps!
Hi , Could you clear my doubt on the following
Total Rev = 72000. Therefore, total cost is 3/4*72000 = $ 54000 . This by total parts produced is 8000 = $6.00 per piece. Where am I faltering ?
