Watch Selling

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(CAT 1996)

A watch dealer incurs an expense of Rs. 150 for producing every watch. He also incurs an additional expenditure of Rs. 30,000, which is independent of the number of watches produced. If he is able to sell a watch during the season, he sells it for Rs. 250. If he fails to do so, he has to sell each watch for Rs. 100.

1. If he is able to sell only 1,200 out of 1,500 watches he has made in the season, then he has made a profit of
a. Rs. 90,000
b. Rs. 75,000
c. Rs. 45,000
d. Rs. 60,000

2. If he produces 1,500 watches, what is the number of watches that he must sell during the season in order to break-even, given that he is able to sell all the watches produced?
a. 500
b. 700
c. 800
d. 1,000

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