Rang Barsey Paint Company (RBPC)

(CAT 2003(L))

Rang Barsey Paint Company (RBPC) is in the business of manufacturing paints. RBPC buys RED, YELLOW, WHITE, ORANGE, and PINK paints. ORANGE paint can be also produced by mixing RED and YELLOW paints in equal proportions. Similarly, PINK paint can also be produced by mixing equal amounts of RED and WHITE paints. Among other paints, RBPC sells CREAM paint, (formed by mixing WHITE and YELLOW in the ratio 70:30) AVOCADO paint (formed by mixing equal amounts of ORANGE and PINK paint) and WASHEDORANGE paint (formed by mixing equal amounts of ORANGE and WHITE paint). The following table provides the price at which RBPC buys paints.

1. The cheapest way to manufacture AVOCADO paint would cost
a. Rs. 19.50 per litre.
b. Rs. 19.75 per litre
c. Rs. 20.00 per litre.
d. Rs. 20.25 per litre.

2. WASHEDORANGE can be manufactured by mixing
a. CREAM and RED in the ratio 14:10.
b. CREAM and RED in the ratio 3:1.
c. YELLOW and PINK in the ratio 1:1.
d. RED, YELLOW, and WHITE in the ratio 1:1:2.

3. Assume that AVOCADO, CREAM and WASHEDORANGE each sells for the same price. Which
of the three is the most profitable to manufacture?
a. AVOCADO
b. CREAM
c. WASHEDORANGE
d. Sufficient data is not available.

For answers click here.