Question
A company produces two types of products, A and B. The
production cost of A is Rs. 300 per unit, and the production cost of B is Rs. 450 per unit. The company sells A at a price of Rs. 500 per unit and B at Rs. 750 per unit. If the company produces a total of 500 units of A and 300 units of B, what is the total profit made by the company?Solution
Profit from A = Selling price of A - Production cost of A Profit from A = 500 - 300 = 200 per unit. Profit from B = Selling price of B - Production cost of B Profit from B = 750 - 450 = 300 per unit. Total profit = (Profit from A × number of units of A) + (Profit from B × number of units of B) Total profit = (200 × 500) + (300 × 300) Total profit = 100000 + 90000 = 190000 Correct answer: e. 190000
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