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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dhart · Answer

selling 10000 of chip with a 20 % proft

1.2 * 10k =12600

TrophicEagle682 · Answer

Your explanation is wrong: 1.2 * 10k = 12000, not 12600. But the actual answer is 12600 only.

TrophicEagle682 · Answer

Let x be the number of initial chips sold
cost price = 10000* x

5% chips are defective which need to be replaced

So new cost price = 10000 * (1.05)* x

Let selling price of each chip be y
then total selling price will be calculated for x chips, not 1.05*x bcoz damaged chips are not being charged to buyer, they are given free of cost.

So final Selling Price = x*y
final Cost Price = 10000 * (1.05)* x
Profit % = ((SP - CP)/CP)*100 = 20 (Bcoz profit % is 20%)
Solving this equation gives the answer as 12,600:

((x*y - 10000 * (1.05)* x)/(10000 * (1.05)* x)*100 = 20

x gets cancelled out in NR & Dr
only y remains which gives us the selling price

Can anyone share any short cut method for this question?

TrophicEagle682 · Answer

Can anyone share any short cut method for this question?

dhart · Answer

selling 10000 of chip , but 5% got defective hence replaced with new 5% , so new cost 10500

i had forgotten to change the cost price.

he made a profit of 20% on the new cost price

1.2 * 10500 =12600

QuantsGuy · Answer

Let SP be A

(A- 1.05* 10000)/(1.05* 1000) x 100 = 20 
(A- 10500/10500 )= 0.2
A-10500= 2100
A= 12600.

gautamK0206 · Answer

Let's say the seller sells 100 chips initially, but 5% he has to replace for free, so totally he is giving out 105 chips for the price of 100 only.
That makes, the cost price of 105 chips and the selling price of only 100 chips.

cost price of 105 = 10000 * 105
selling price of 100 = 100 * s (assuming s to the selling price of 1 chip)
Profit of 20% = 
100s-10000*105 = 20% of 10000*105
s = 12600
Hence,  the correct answer is: B. 12,600

counterclash1 · Answer

Correct Answer: B (12,600)

PROBLEM CORE:
- Cost per chip = 10,000
- Defective rate = 5% (replaced at 0 extra cost)
- Desired profit margin = 20%

SMART NUMBER SETUP (Assume 100 chips ordered):
1. Total chips supplied = 100 + 5 (replacements) = 105 chips.
2. Total Cost = 105 * 10,000 = 1,050,000.
3. Total Revenue for 20% Profit = 1,050,000 * 1.20 = 1,260,000.
4. Selling Price per chip charged = 1,260,000 / 100 = 12,600.

UNIT FACTOR SHORTCUT:
- Effective Cost per unit sold = 10,000 * 1.05 = 10,500
- Selling Price = 10,500 * 1.20 = 12,600

odionam · Answer

let he purchased x chip initial total cost = 10000*x, since 5% chip were replaced to retailer without cost means retailer didn't pay exrtra but it cost for extra 5% to wholeseller now new cost is 10000* 1.05x profit 20% so total selling price is = 1.2 * 10,000* 1.05x this selling price is for x chip. so selling price of each chip is 12600x/x= 12600

KarishmaB · Answer

Using successive percentage changes, we know that for mark-up, discount and profit,  (1+\frac{m}{100})(1-\frac{d}{100}) = (1+\frac{p}{100})

Say the cost of a chip is $1. The wholesaler is selling 105 chips for cost of 100 chips so discount d% is 5/105. 
Profit p% is 20%.

(1+\frac{m}{100})(1- \frac{5}{105}) = (1+\frac{20}{100}) 
 m = \frac{13}{50}*100

i.e. a mark up of 26%.
Hence $10,000 chip is being sold at  10,000(1+\frac{26}{100}) =12,600

Answer (B)

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

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