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A fixed cost of $1000 is incurred in producing a batch of 200 machine

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Bunuel
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A fixed cost of $1000 is incurred in producing a batch of 200 machine [#permalink] New post   18 Feb 2020, 06:08
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A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally, $20 goes into the finishing and packaging of each machine tool. If a consignment of 50 batches was sold for $1000000, what is the percentage profit earned by the company on this consignment?

A. 30%
B. 300%
C. 3000%
D. 60%
E. 600%
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Re: A fixed cost of $1000 is incurred in producing a batch of 200 machine [#permalink] New post   18 Feb 2020, 06:16
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Bunuel wrote:
A fixed cost of $1000 is incurred in producing a batch of 200 machine tools. Additionally, $20 goes into the finishing and packaging of each machine tool. If a consignment of 50 batches was sold for $1000000, what is the percentage profit earned by the company on this consignment?

A. 30%
B. 300%
C. 3000%
D. 60%
E. 600%


Total Cost incurred per batch = \(1000 + 20*(200) = 5000\)
For 50 batches -> \(5000*50 = 2,50,000\)

Selling price for 50 batches = 10,00,000

Total Profit = 7,50,000

Profit percentage = \(\frac{7,50,000}{2,50,000} * 100\) = 300% -> Answer - B
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A fixed cost of $1000 is incurred in producing a batch of 200 machine [#permalink] New post   18 Feb 2020, 06:46
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One batch = 200 tools

---> 50 batches = 50*200 tools

Lets calculate the CP of making 1 tool.

CP = Fixed cost + F&P cost ........ F&P = finishing and packaging cost

Fixed cost of 1 tool = 10000/200 = 5$
F&P cost of 1 tool = 20$
CP of 1 tool = 20 + 5 = 25$

Lets calculate the SP on 1 tool.

SP of 50 batches = 1000000$
SP of 1 batch = 10^6/50 = 20000$
SP of 1 tool = 20000/200 = 100$ ........... 1 batch = 200 tools per question stem

Profit = SP - CP = 100-25 = 75$

Profit % = Proft/CP*100 = 75/25*100 = 300%

Hence, B

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A fixed cost of $1000 is incurred in producing a batch of 200 machine [#permalink]
18 Feb 2020, 06:46
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