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If the excavation of earth is done manually then it costs Rs. 80 per m3. A Machine can excavate at a fixed cost of Rs. 60000 plus a variable cost of Rs. 20 per m3. The quantity of earth for which the cost of excavation by machine will be equal to the cost by manual excavation is
1. 500 m3
2. 1000 m3
3. 1500 m3
4. 2000 m3

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Correct Answer - Option 2 : 1000 m3

Calculation:

Let us assume x m3 quantity of earth are excavated

if excavations are done by manually then total cost of excavation = 80x...........(i)

If excavations are done by machine then total cost of excavation = 60000 + 20x..........(ii)

Then quantity of earth for which the cost of excavation by machine will be equal to the cost by manual excavation. so equate equation (i) and (ii)

80x = 60000 + 20x

60x = 60000

x = 1000 m3

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