With a scrap rate of 20%, if the output is 10,000 units, how many units are produced overall?

To determine the overall number of units produced given a scrap rate of 20% and an output of 10,000 units, it is essential to understand the relationship between the scrap rate and the total production.

In this scenario, the scrap rate indicates that 20% of the produced units are not usable and are considered waste. This means that only 80% of the units produced contribute to the output. To find the total number of units produced, you can set up the equation based on the percentage remaining after accounting for the scrap:

Output = (1 - Scrap Rate) × Total Production

Given that 80% of the production is used for the output, we can rewrite the equation as:

10,000 units = 0.80 × Total Production

To find the Total Production, we rearrange the equation:

Total Production = 10,000 units / 0.80

Calculating this gives:

Total Production = 10,000 / 0.80 = 12,500 units

Thus, with a 20% scrap rate, to achieve an output of 10,000 usable units, the overall production must be 12,500 units. This calculation effectively demonstrates how to adjust for the scrap rate in order