CAT 2003 Slot 1 — DILR Question 35
Answer the following question based on the information given below.
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Rang Barsey Paint Company (RBPC) is in the business of manufacturing paints. RBPC buys RED, YELLOW, WHITE, ORANGE, and PINK paints. ORANGE paint can be also produced by mixing RED and YELLOW paints in equal proportions. Similarly, PINK paint can also be produced by mixing equal amounts of RED and WHITE paints. Among other paints, RBPC sells CREAM paint, (formed by mixing WHITE and YELLOW in the ratio 70 : 30) AVOCADO paint (formed by mixing equal amounts of ORANGE and PINK paint) and WASHEDORANGE paint (formed by mixing equal amounts of ORANGE and WHITE paint). The following table provides the price at which RBPC buys paints.
Assume that AVOCADO, CREAM, and WASHEDORANGE each sells for the same price. Which of the three is the most profitable to manufacture?
Answer & solution
- A
AVOCADO
CREAM
- C
WASHEDORANGE
- D
Sufficient data is not available
From the solution to the first question of the set we know that the least possible price for AVOCADO is Rs. 19.75.
The least possible price for CREAM is when WHITE and YELLOW is mixed in the ratio 7 : 3
= Rs. 18
The least possible price for WASHEDORANGE is when ORANGE and WHITE is mixed in the ratio 1 : 1
= Rs. 18.5
∴ Profitability is the maximum for CREAM.
Hence, option (b).