A bakery produced 5000 cakes at a total cost of ₹250,000. They gave away 500 cakes for a promotional event. For the remaining cakes, they offered a 20% discount on the market price of ₹75 per cake. Additionally, they gave one cake free with every 9 cakes bought. If all 5000 cakes were distributed, what is their overall gain or loss percentage?
- (a)4.5 % profit
- (b)2.8 % profit
- (c)2.8 % loss
- (d)4.5 % loss
Answer
Why
Correct — C. Compare the ₹250,000 cost with the money the paid-for cakes bring in.
Cakes left after the giveaway = 5000 − 500 = 4500
Price after 20% discount = 0.8 × ₹75 = ₹60
1 free with every 9 bought → 9 paid in every 10
Paid cakes = 4500 × 9⁄10 = 4050
Revenue = 4050 × ₹60 = ₹243,000
Loss = 250,000 − 243,000 = ₹7,000
Loss % = 7,000 ÷ 250,000 × 100 = 2.8% loss → option (c)
Why the others are wrong
- (a)4.5 % profit — Revenue (₹243,000) is below cost (₹250,000), so the result is a loss, not a profit. And 4.5% of ₹250,000 would be ₹11,250, not the ₹7,000 gap.
- (b)2.8 % profit — Right size, wrong direction. The ₹7,000 gap is 2.8% of cost, but revenue of ₹243,000 falls short of the ₹250,000 cost, so it is a loss.
- (d)4.5 % loss — A 4.5% loss means losing ₹11,250 on a ₹250,000 cost. The actual shortfall is 250,000 − 243,000 = ₹7,000, which is 2.8%.
Concept
Overall gain or loss compares total revenue with total cost. Every cake is in the cost, but only the cakes someone paid for bring in money.
So remove the free cakes first. The 500 promotional cakes earn nothing, and "one cake free with every 9 cakes bought" means 9 of every 10 cakes handed over are paid for.
Then price the paid cakes at the discounted rate and take the gain or loss as a percentage of cost.
Reading the offer as 1 free cake in every 9 handed over would make 500 of the 4500 free and give ₹240,000, a 4% loss. No option says 4%, and the stem's wording, 9 cakes bought, gives the keyed 2.8%.
Key facts
- One free with every 9 bought means 9 of every 10 items handed over are paid for.
- Price after a 20% discount = 0.8 × marked price: 0.8 × ₹75 = ₹60.
- Gain or loss % is taken on cost: 7,000 ÷ 250,000 × 100 = 2.8%.
Study next
Common traps
- Dividing 4500 by 9 to count the free cakes. One free with every 9 bought makes lots of 10, so 450 are free, not 500.
- Charging the 500 promotional cakes at ₹60. They add to the cost but bring in nothing.
The same build (giveaway, discount, then a free-with-purchase offer) is 12 Sep 2025, 09:00, Quant Q.13: 1000 toy cars left, 2 free for every 8 bought, so 800 paid at ₹108, a 4% loss.
It returns at 20 Sep 2025, 12:30, Quant Q.5: 750 licenses left, 1 free for every 9 bought, a 13.94% loss.
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