Profit and Loss — An item sells for ₹ 60 each. It costs ₹ 40 per item to produce, and weekly fixed overheads are ₹ 3000. How many units must be produced and sold to earn at least ₹ 1000 profit per week?

Difficulty: Easy

Correct Answer: 200

Explanation:


Introduction / Context:
This is a break-even / target-profit computation using contribution analysis. Profit equals contribution per unit times quantity minus fixed cost. Solve the inequality to meet or exceed the required profit threshold.


Given Data / Assumptions:

  • Selling price (SP) per unit = ₹ 60.
  • Variable cost (materials + labour) = ₹ 40 per unit.
  • Fixed overheads per week = ₹ 3000.
  • Target profit ≥ ₹ 1000 per week.


Concept / Approach:
Contribution per unit = SP − VC = 20. Profit = Contribution * n − Fixed. Set Profit ≥ 1000 and solve for n. Choose the smallest integer n satisfying the inequality.


Step-by-Step Solution:

Contribution = 60 − 40 = 20 per unit Profit = 20n − 3000 Requirement: 20n − 3000 ≥ 1000 ⇒ 20n ≥ 4000 ⇒ n ≥ 200 Minimum feasible integer n = 200


Verification / Alternative check:
At n = 200: Profit = 20*200 − 3000 = 4000 − 3000 = 1000 (meets requirement).


Why Other Options Are Wrong:
150, 250, 300, 400 do not represent the minimum satisfying value; only 200 is the least n with profit ≥ 1000.


Common Pitfalls:
Treating fixed overhead as per-unit, or using revenue instead of contribution to compute the threshold.


Final Answer:
200

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