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CAT 2017 Slot 2 — QA Question 7

Profit & LossEasy

The manufacturer of a table sells it to a wholesale dealer at a profit of 10%. The wholesale dealer sells the table to a retailer at a profit of 30%. Finally, the retailer sells it to a customer at a profit of 50%. If the customer pays Rs 4290 for the table, then its manufacturing cost (in Rs) is

Answer & solution

Correct answer: 2000

  • A

    1500

  • 2000

  • C

    2500

  • D

    3000

Solution

Easy

Each sale multiplies the price by (1+profit)(1+\text{profit}). Chain the three factors onto the manufacturing cost and set the product equal to what the customer pays.

1

Chain the mark-ups. Let the manufacturing cost be xx. Successive profits of 10%,30%,50%10\%,30\%,50\% multiply by 1.1, 1.3, 1.51.1,\ 1.3,\ 1.5.

customer price=x×1.1×1.3×1.5⇒ =2.145 x\begin{aligned} &\text{customer price}=x\times 1.1\times 1.3\times 1.5\\ &\Rightarrow\ =2.145\,x \end{aligned}
2

Solve. The customer pays Rs 42904290.

2.145 x=4290⇒ x=42902.145=2000\begin{aligned} &2.145\,x=4290\\ &\Rightarrow\ x=\frac{4290}{2.145}=2000 \end{aligned}
Manufacturing cost=Rs 2000\text{Manufacturing cost}=\text{Rs }2000

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CAT 2017 Slot 2 QA Q7: The manufacturer of a table sells it to a wholesale dealer at a profit of 10%. The wholesale dealer sells the — Solution | TheCATExam