A manufacturer undertakes to supply of a particular component at per piece. According to his estimates, even if components fail to pass the quality test, then he will make a profit of . However, as it turned out, of the components were rejected. Then what is the loss to the manufacturer?
- A₹ 24,000
- B₹ 26,000
- C₹ 28,000
- D₹ 30,000
Solution & Step-by-step Explanation
Let's find the total cost of production based on the manufacturer's initial estimates:
* Total components produced =
* Estimated passed components =
* Expected revenue from these pieces =
Since this revenue includes a profit on the Total Cost (TC):
Now let's look at the actual scenario:
* of components were rejected only were accepted.
* Actual revenue generated =
The actual financial loss incurred by the manufacturer is:
* Total components produced =
* Estimated passed components =
* Expected revenue from these pieces =
Since this revenue includes a profit on the Total Cost (TC):
Now let's look at the actual scenario:
* of components were rejected only were accepted.
* Actual revenue generated =
The actual financial loss incurred by the manufacturer is: