A machine takes 40 hours to build a product and this production costs

Question

A machine takes 40 hours to build a product and this production costs the factory $1.80 per hour. Twenty per cent of the production is wasted during sorting, which costs the factory $22.50 per kg of the product. The factory measured the weight of the product as 8 kg. At what price must the factory sell the product to earn a profit of 33.33%?

(A) $360

(B) $396

(C) $404

(D) $420

(E) $510

Are You Up For the Challenge: 700 Level Questions

(A) $360

(B) $396

(C) $404

(D) $420

(E) $510

Are You Up For the Challenge: 700 Level Questions

Anurocks1233 · Answer

So cost price came to 
40*1.8 + 22.5 * 8 
= 72 + 180 
=252

Apply 33.3% markup
252 + 252/3 = 336

Although no option is matching to it. 
I guess there is a issue with option

Posted from my mobile device

HarshavardhanR · Answer

1) Final Product produced -> 8 kg
2) Pre-sorting production -> 10 kg (20% of this was wasted to yield 8 kgs, final).
3) Cost incurred in sorting -> 22.5 x 10 = $225
4) Cost incurred in production -> 40 x 1.8 = $72
5) Total cost incurred to create product -> 225 + 72 = $297
6) Selling Price of this product, given 33.33% profit -> 4/3 x 297 = 4 x 99 = $396. Choice B.

Hope this helps!

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Harsha
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Rishm · Answer

This is a poorly written question, 20 percent production is wasted talks about cost rather than the weight of the product, it must have been written as 10kg of the product initially. In GMAT, these questions are written in a different manner. Maybe reword it a bit.

1) Final Product produced -> 8 kg

KarishmaB · Answer

To clarify, the question should say "...weight of   sorted   product as 8 kg". So initially built product must be 10 kg (since 20% gets wasted)

Cost of building the product = 40 * 1.8 = $72
Cost of sorting 10 kg product = $22.5 * 10 =$225

Total cost to the company = 72 + 225 = 297

For a 33.33% profit, multiplier will be 4/3 so Selling price = 297 * 4/3 = $396

Answer (B)

A machine takes 40 hours to build a product and this production costs

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