The cost of raw material of a product increases by 30%, the manufacturing cost increases by 20% and the selling price of the product increases by 60%. The raw material and the manufacturing cost, originally, formed 40% and 60% of the total cost respectively. If the original profit % was one-fourth the original manufacturing cost, find the approximation new profit percentage.

Answer: A Let the total initial cost of the product be Rs 100. manufacturing cost = Rs 60 Raw materials cost = Rs 40 Also, original selling price = Rs 100 + 60/4 = Rs 115. New raw material cost = Rs 40 + 30% of 40 = Rs 52. New manufacturing cost = Rs 60 + 20% of 60 = Rs 72. New cost of the product = Rs 124. New selling price = 115+ 60% of 115 = Rs 184. New profit percentage = 60/124 * 100 = 48.39%.

Q. No. 2:

A shopkeeper gives a discount of 12%, whereas a customer makes cash payment. Let 'p' denotes the percentage, above the cost price, that the shopkeeper must mark up the price of the articles ['p' is an integer] in order to make a profit of x% (x<100). Which of the following is the possible value(s) of x?

Answer: C Let the cost price of one article is Rs r then, Marked price of the article = r(1+ p/100) Selling price = r(1+ p/100)(1- 12/100) Profit percentage = x% => r(1+ p/100) (1- 12/100) = r(1 + x/100) => p = 25(12+x)/22 As, p is an integer, x must be multiple of 22. All the possible values x, less than 100 are k= 10,32,54,76,98 Except option 'C' all the options are possible.

Q. No. 3:

A salesman sells two kinds of trousers: cotton and woollen. A pair of cotton trousers is sold at 30% profit and a pair of woollen trousers is sold at 50% profit. The salesman has calculated that if he sells 100% more woolen trousers than cotton trousers, his overall profit will be 45%. However he ends up selling 50% more cotton trousers than woollen trousers. What will be his overall profit?

Answer: B Let the cost price of 1 cotton trouser and 1 woollen trouser be ‘C’ and ‘W’ respectively. Case I: Number of woollen trousers sold is 100% more than cotton trousers 1.3C + 1.5 × 2 × W = 1.45 (C + 2W) => 0.15C = 0.1W => 3C = 2W Case II: Number of cotton trousers sold is 50% more than woollen trousers S.P. = 1.3C + 1.5*2W/3 => S.P. = 1.3C + W = 2.8C => CP = C+ 2/3 *W= 2C Profit = (2.8C - 2C)/2C * 100 = 40%

KK, an aspiring entrepreneur wanted to set up a pen drive manufacturing unit. Since technology was
changing very fast, he wanted to carefully the demand and the likely profits before investing. Market survey indicated that he would be able to sell 1 lac units before customers shifted to different gadgets. KK realized that he had no incur two kinds of costs – fixed costs (the costs which do not change, irrespective of number of units of pen drives produced) and variable costs (= variable cost per unit multiplied by number of units). KK expected fixed cost to be Rs. 40 lac and variable cost to be Rs. 100 per unit. He expected each pen drive to be sold at Rs. 200.

Q. No. 1:

What would be the break-even point (defined as no profit, no loss situation) for KK’s factory in term of sales?

Answer: A Let the break even point be attained on the sale of 'x' units. Therefore, 4000000 + 100x = 200x Or, x = 40000 So, the total sales = 40000 x Rs. 200 = Rs. 80 lac

Q. No. 2:

KK was skeptical that per unit variable cost might increase by 10% though the demand might remain same. What will be the expected changes in profit in such a case?

Answer: D Total cost when 1 lac units were sold when the variable cost has increased by 10 % = Rs. 40 lac + Rs. 110 lac = Rs. 150 lac Initial Profit at normal variable cost = Rs. 200 lac – Rs. 140 lac = Rs. 60 lac New Profit = Rs. 200 lac – Rs. 150 lac = Rs. 50 lac Therefore percentage decrease in the profit = (10/60) x 100 = 16.67%

Q. No. 5:

In a period from January to March, Jamshedpur Electronics sold 3150 units of Television, having started with a beginning inventory of 2520 units and ending with an inventory of 2880. What was the value of order placed (Rupees in thousands) by Jamshedpur Electronics during the three months period? [Profits are 25% of cost price, uniformly.]

Answer: D Units ordered = Units sold + Ending Inventory – Beginning Inventory => 3150 + 2880 – 2520 = 3510 Total sales of Television in Rs. Thousand => 900 + 1800 + 6300 + 1050 + 2100 + 7350 + 1200 + 2400 + 8400 = 31500 Sales Price per unit of Television in Rs. Thousand = 31500/3150 = 10 Profits are 25% of the cost price. Sales Price = Cost Price + Profits = Cost Price + 0.25 × Cost Price = 1.25 × Cost Price Cost Price per unit of Television = Sales Price per unit/1.25 = 10/1.25 = 8 The value of the order placed in Rs. Thousand = Units ordered × Cost Price per unit => 3510 × 8 = 28080

Q. No. 6:

Two persons Raj and Ramu started working for a company in similar jobs on January 1, 1991. Raj's initial monthly salary was Rs 400, which increases by Rs 40 after every year. Ramu's initial monthly salary was Rs 500 which increases by Rs 20 after every six months. If these arrangements continue till December 31, 200. Find the total salary they received during that period.

Answer: D Raj's salary as on 1 jan 1991 is Rs 400 per month His increment in his month salary is Rs 40 per annum His total salary from 1 jan 1991 to 31st dec 2000 i.e in ten years => 12[2(400) +(10-1)40] * 10/2 = Rs 69,600 Ramu's salary as on Jan 1st 1991 is Rs 550 and his half yearly increment in his month salary is Rs 20. His total salary from 1 jan 1991 to dec 31, 2000 => 6[2(500)+(20-1)20] * 20/2 = Rs 82,800 Total salary of Raj and Ramu in the ten year period = Rs 69600+ Rs 82800 => Rs 1,52,400