Question

When the per unit production cost of an item is Tk. 80 and other costs per unit is Tk 20, the producer makes a profit of 15% on his total cost. If the production cost decreases by 20% and the selling price remains the same, calculate the profit



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Answer 1

Answer:

QUESTION STATS: based on 34 sessions

53% (01:56) correct

47% (02:36) wrong

When the per unit production cost of an item is Tk. 80 and other costs per unit is Tk 20, the producer makes a profit of 15% on his total cost. If the production cost decreases by 20% and the selling price remains the same, calculate the profit in Tk.

(A) 31

(B) 34

(C) 35

(D) 43

(E) None of these

Answer 2

Answer:

Cost Price = Total cost of production of one unit = Tk.100

Profit percentage = 15%

Therefore, Selling Price = 115% of Cost Price = * 100 = Tk.115

New production cost = 80% of 80 = Tk.64

New Cost Price = 64 + 20 = Tk.84

Since the selling price remains the same, Profit = 115 – 84 = 31.

Note that we have to calculate the actual profit here and not the profit percentage. If you ended up calculating the profit percentage instead of the profit (comprehension bias), you may end up marking either option C or E, which are trap answers.

The correct answer option is A.

Hope that helps!

Aravind BT