XAT 2017 — QA & DI Question 19
Answer the next 4 questions based on the following information:
Abdul has 8 factories, with different capacities, producing boutique kurtas. In the production process, he incurs raw material cost, selling cost (for packaging and transportation) and labour cost. These costs per kurta vary across factories. In all these factories, a worker takes 2 hours to produce a kurta. Profit per kurta is calculated by deducting raw material cost, selling cost and labour cost from the selling price (Profit = selling price - raw materials cost - selling cost - labour cost). Any other cost can be ignored.
Exhibit: Business Details of Abdul’s 8 Factories
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Which of the following options is in decreasing order of raw materials cost?
Answer & solution
Factory 3, Factory 4, Factory 7, Factory 5
- B
Factory 4, Factory 3, Factory 2, Factory 5
- C
Factory 6, Factory 3, Factory 5, Factory 7
- D
Factory 6, Factory 8, Factory 7, Factory 2
- E
Factory 8, Factory 3, Factory 2, Factory 4
We know, Selling price = Raw material cost + Labour cost + Selling cost + Profit
∴ Raw material cost = Selling price – Labour cost – Selling cost - Profit
Here, a worker takes 2 hours to produce a kurta.
∴ Raw material cost for F1 = 4800 – 775 – 60 – 2 × 450 = 3065
Similarly, we can make the following table.
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Now, check the option for the decreasing order.
Hence, option (a).