Question

Given the production cost associated with an item is Rs. 20 and fixed cost is Rs. 60,000 per
month. Each item is sold at Rs. 32 per item. If the target profit is Rs. 18,000, then number of
item to produced and sold is as
​

Answer 1

Given : the production cost associated with an item is Rs. 20 and fixed cost is Rs. 60,000 per month

Each item is sold at Rs. 32 per item.

the target profit is Rs. 18,000,

To Find : Number of item to be produced and sold  

Solution:

Let say Number of item to be produced and sold in a Month   = M

the production cost associated with an item is Rs. 20

=> Variable cost = 20M  Rs

fixed cost is Rs. 60,000 per month

Total Cost  = 20M + 60000 Rs

Each item is sold at Rs. 32 per item.

=> Total Selling Price = 32M Rs

Profit = Total Selling Price - Total Cost  

=> Profit = 32M  - (20M + 60000)    Rs

Profit  = 18000  Rs

Equate both

=> 32M  - (20M + 60000)  = 18000

=> 12M  = 78000

=> M  = 6500

Number of item to be produced and sold   in a month = 6500

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