Oil equals to 20% of 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 the total cost. (Total cost = Cost of groundnuts and processing cost) ?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 100.
For 5 kg,
Cost = 100 + 25 = 125 Rs
SP = (20/100) × 125 + 125 = 150 Rs
SP = 1 kg oil + 4 kg cattle feed
150 = 1 kg oil + (4 × 12.5)
1 kg oil = 150 - 50
= 100 Rs /kg