A retailer purchased a batch of goods for Rs. 5,000. Due to a manufacturing defect, 5% of the goods were damaged. if the retailer wants to make a profit of 20% on the remaining goods, at what price should the undamaged goods be sold?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. Rs. 5,700.
The retailer purchased goods for Rs. 5,000, but 5% of the goods were damaged.
Therefore, the undamaged goods constitute 95% of the total goods.
Value of undamaged goods = 95% × 5000 = 4750
The profit amount on the undamaged goods = 20% × 4750 = 950
So,
Selling Price = Value of undamaged goods + Profit
⇒ 4750 + 950 = 5700
Thus,
The retailer should sell the undamaged goods for Rs. 5700 to make a 20% profit on the remaining goods.