Oil, equal to 20% of the weight of groundnut, is extracted in a mill. The matter left after extraction is sold as cattle feed at the rate o… — Answer & Discussion

Oil, equal to 20% of the weight of groundnut, is extracted in a mill. The matter left after extraction is sold as cattle feed at the rate of Rs. 12.5/kg. The groundnuts are bought at Rs. 20/kg. The processing cost is Rs. 5/kg. At what price (Rs. per kg) should the oil be sold to earn 20% profit on total costs (Total cost = Cost of groundnuts and Processing costs)?

A250
B150
C200
D100

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Discussion 1

CCommunity11 May 2019

Let the Total weight of the groundnut = 100 kgs

Total cost = 100 × (20 + 5) = Rs. 2500

Amount that should be received after 20% profit = 2500 × 1.2 = Rs. 3000

Since 80% of the weight of groundnut is left and sold as cattle feed for Rs. 12.5/kg;

Amount received after selling the waste = 100 × 0.8 × 12.5 = Rs. 1000

∴ Remaining amount to be received by selling oil = 3000 – 1000 = Rs. 2000

Since weight of oil = 100 × 0.2 = 20 litres

∴ Selling cost of oil = 2000/20 = Rs. 100 per liter