pintukr
Arun mixes coffee and chicory in the ratio 5:3. Then, he sells each unit of the mixture at a price 10% above the cost price of one unit of coffee powder. If Arun realizes a profit of 28% by doing so, by what percentage is the cost price of coffee costlier than the cost price of chicory?
A. 40
B. 50
C. 60
D. 75
E. 80
Two ways.
First, Plugging In The Answers (PITA). I like trying B and D.
Let's say chicory costs $1 per unit.
B: Chicory costs $1 per unit. Coffee costs $1.50 per unit. The mixture costs (3*1)+(5*1.5) = 3+7.5 = $10.50. He sells the mixture for $1.65 per unit, and 8*1.65 = $13.20. That's a profit of $2.70, which is less than 28% of $10.50.
D: Chicory costs $1 per unit. Coffee costs $1.75 per unit. The mixture costs (3*1)+(5*1.75) = 3+8.75 = $11.75. He sells the mixture for $1.925 per unit, and 8*1.925 = $15.40. That's a profit of $3.65, which is more than 28% of $11.75.
B was less than 28% and D was more than 28%. We need something in between.
Answer choice C.
Second, Algebra.
Let's make Y = the cost per unit of chicory. Y(1+x) = Y+Yx is the cost per unit of coffee, where x is the percentage by which coffee costs more per unit than does chicory.
Total cost = \(5(Y+Yx)+3Y = 5Y+5Yx+3Y = 8Y+5Yx\)\(\)
Total revenue = \(8*1.1*(Y+Yx) = 8.8Y+8.8Yx\)
Total profit = \(8.8Y+8.8Yx-(8Y+5Yx) = 8.8Y+8.8Yx-8Y-5Yx = 0.8Y+3.8Yx\)
Profit/Cost = 0.28
\((0.8Y+3.8Yx)/(8Y+5Yx) = 0.28\)
\((0.8Y+3.8Yx) = 0.28(8Y+5Yx)\)
\(0.8Y+3.8Yx = 2.24Y+1.4Yx\)
\(2.4Yx = 1.44Y\)
x = 1.44Y/2.4Y = 144/240 = 72/120 = 36/60 = 6/10 = 60%
Answer choice C.