CMAT 2016 Solved Question Paper

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(Q. Nos. 12-13) The graph below gives number of bikes produced by the two competitor companies A and B over the past years (Numbers in thousands).

Question : 13 of 100

Marks: +1, -0

The production cost of a product A is as follows : Material-10%, Labour-20% and Overheads-15%. Other costs (including storage, distribution and advertisement costs) add up to ? 330 per unit. If the manufacturer wants to earn 20% profit, then what should be the selling price per unit of product A?

₹ 720
₹ 700
₹ 840
₹ 600

Validate

Solution:

(a) Let the total cost be ₹ x
Cost on Material + Labour + Overheads
= (10 + 20+ 15)% = 45%
Cost on storage, distribution and advertisement
= (100- 45)%= 55%
∴ 55% of x = 330
⇒

{55x}/100

= 330
⇒ x = 600
So, the required selling price = 600 + 20% of 600
= 600 +

{20 × 600}/100

= 600+ 120= ₹ 720

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