1.  Rotomac produces very fine quality of writing pens. Company knows that on average 10% of the produced pens are always defective so are rejected before packing. Company promises to deliver 7200 pens to its wholesaler at ₹ 10 each. It estimates the overall profit on all the manufactured pens to be 25%. What is the manufacturing cost of each pen?
A. ₹ 6
B. ₹ 7.2
C. ₹ 5.6
D. ₹ 8

Answer: Option B

Explanation:

You must know that the company is able to deliver only 90% of manufactured pens. So let k be the manufacturing price of a pen

Then,

Total income (including 25% profit) = 8000 x k x 1.25

Also this same income is obtained by selling 90% manufactured at ₹10 which is equal to 7200 x 10.

 8000 x K x 1.2 = 7200 x 10

 K = ₹ 7.2      ( 90% of 8000 = 7200)