Raghuvir purchased some perishable items for sale but 36% of those items could not be sold and went bad. However, Raghuvir managed to sell the rest of the items at a price that helped him earn an overall profit of 28%. At what percentage above the cost price of each item did Raghuvir sell each of the items that did not go bad?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. 100%.
36% of items went bad and the total profit must be 28%.
Profit = SP - CP
Profit% = [(SP - CP)/CP] × 100
S.P. = ( C.P. × 100) × (100 + Profit %), [where S.P. = Selling Price, C.P. = Cost Price]
Let the cost of one item be Rs. 1
Thus, the cost of 100 items will be Rs. 100
As 36% went bad, so remaining items = 100 - 36 = 64
Total overall profit must be 28%.
S.P. = ( C.P. × 100) × (100 + Profit %)
S.P. = ( 100 × 100) × (100 + 28 %) = Rs. 128
64 items must be sold for Rs. 128.
Profit = SP - CP = 128 - 64 = 64
Profit% = [(SP - CP)/CP] × 100 = (64/64) × 100 = 100%