A Wholeseller supplies few chips to a retailer every year. Each Chip

Question

A Wholeseller supplies few chips to a retailer every year. Each Chip Costs 10,000 to the wholeseller. 5% of the chips are defective and they are to be replaced without charging anything extra. if the wholeseller still makes a profit of 20%, at what price he is selling it to the retailer.

A. 12,300
B. 12,600
C. 12,900
D. 13,200
E. 13,500

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Legenddary1234 · Answer

Let's say the wholesaler sells 20 chips to the retailer.

According to the question 
The Cost of 1 chip is 10k
The cost of 20 chips is 200K.

Wholesaler make 20% profit, which is 40k. Then total price retailer pays to a wholesaler for 20 chips is 240K.

But, 5% of chips are defective (assumed they are returned and no money is paid for those) then 240k paid by 19 chips.

Approximately equal to 12600.

Mirko92 · Answer

IMO answer is B.

Solution 
Profit=20%, so Revenue/Costs = 120/100
Price = p
Chips sold = c
Revenue = p * c
Cost = (10,000 * c) + (5/100 * 10,000 * c) = 10,000c + 500c = 10,500c

So, Profit = 120/100 = (p*c) / 10,500c
120/100 = p/10,500
120 = 100p/10,500
120 = p/105
120*105 = p
 12,600 = p

Shubhradeep · Answer

Option B

Suppose the wholeseller sells 100y chips. Now 5% of the chips are deffective so he has to replace those without any extra charge. 
That means,  the the wholeseller has to keep  105y  chips out of his shelf to make it a 100y chip sell.

For these 105 chips, cost for the wholeseller is (105y*10000)  but he still makes a 20% profit. So  the selling price is
(105y*1.2*10000) = 126y * 10000

That says, he sells each chip for 126

Correct option is B

A Wholeseller supplies few chips to a retailer every year. Each Chip

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A Wholeseller supplies few chips to a retailer every year. Each Chip

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