Multiple choice

A factory outlet has decided to dispose of its old stock by selling only one set of cups for Rs. 287, recovering only variable costs. If the fixed cost is 18% of the total cost, what was the cost price of each set of cups?

  1. Rs. 320

  2. Rs. 350

  3. Rs. 325

  4. Rs. 340
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The selling price of Rs. 287 covers only variable costs, meaning it's 82% of the total cost (since fixed cost is 18%). Let CP be the cost price. Then 82% of CP = 287, so CP = 287/0.82 = 350. Option A (320) would give variable cost of ~262. Option C (325) and D (340) don't satisfy the 82% ratio.

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