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06 Sep 2015, 15:40
Kudos
Bookmarks
A big question I have is, why does following method give different answer though I believe there is no flaw in my method of attempting this problem -
Purchase price per camera = 250/1.2 = 1250/6.
Total purchase price = 60 * 1250/6 = 12500$
Got return money because of 6 cameras which were returned = 50% of 6 = [(6 * 250/1.2)/2] = 625$
Effective purchase price = 12500 - 625 = 11875$
Total sale = 54 * 250 = 13500$.
Hence % profit = [(Total sale - effective purchase price) / (effective purchase price)] x 100
= [(13500 - 11875) / 11875] x 100
= (1625/11875) x 100
= 13.684 Ans.
Dealer paid total cost of 60 cameras and then I deducted 50% cost of 6 cameras from that instead of adding it as a revenue. So in this case, technically 54 cameras have been sold and 57 were bought.
Can anyone explain why can't I do that way?
TIA
Purchase price per camera = 250/1.2 = 1250/6.
Total purchase price = 60 * 1250/6 = 12500$
Got return money because of 6 cameras which were returned = 50% of 6 = [(6 * 250/1.2)/2] = 625$
Effective purchase price = 12500 - 625 = 11875$
Total sale = 54 * 250 = 13500$.
Hence % profit = [(Total sale - effective purchase price) / (effective purchase price)] x 100
= [(13500 - 11875) / 11875] x 100
= (1625/11875) x 100
= 13.684 Ans.
Dealer paid total cost of 60 cameras and then I deducted 50% cost of 6 cameras from that instead of adding it as a revenue. So in this case, technically 54 cameras have been sold and 57 were bought.
Can anyone explain why can't I do that way?
TIA
06 Sep 2015, 20:58
Kudos
Bookmarks
bablu1234
You have assumed the situation to be a bit different from what it actually is.
You have assumed that he bought 54 cameras at 250/1.2 each and 6 cameras at 125/1.2 each.
Then he sold 54 cameras at 250 each and 6 cameras at 0.
While actually this is the situation:
He bought 60 cameras at 250/1.2 each.
He sold 54 at 250 each and sold the rest of the 6 at 125/1.2 each.
The difference (Revenue - Cost) in both cases will be the same but the cost price in the denominator will be different. So profit % obtained will be different. Please check Bunuel's solution on Page 1 to see the actual calculations of this method.
30 Dec 2015, 23:21
Kudos
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sagnik242
The weights are 54 (20% profit on 54 cameras) and 6 (50% loss on 6 cameras).
This is a ratio of 54:6 = 9:1 (in lowest terms). It is the same thing whether you use 54 and 6 as weights or 9 and 1 but 9 and 1 simplify the calculations.
Avg = (A1 * w1 + A2 * w2)/(w1 + w2) = (A1 * 9 + A2 * 1)/(9 + 1) = (A1 * 9 + A2 * 1)/10
.
