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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?

  1. A
    ₹ 24,000
  2. B
    ₹ 26,000
  3. C
    ₹ 28,000
  4. 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:

Practice this question

Try it yourself before checking the explanation above.

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

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