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A manufacturer sells a product to wholesaler at a profit of 20%, the wholesaler sells it to retailer at profit of 15% and retailer sells it to customer at 10% profit. If the customer pays INR 759, what is the cost of manufacturing of the article?

A manufacturer sells a product to wholesaler at a profit of 20%, the wholesaler sells it to retailer at profit of 15% and retailer sells it to customer at 10% profit. If the customer pays INR 759, what is the cost of manufacturing of the article? Correct Answer INR 500

Given:

The manufacturer sells a product to the wholesaler at a profit of 20%, the wholesaler sells it to the retailer at profit of 15% and the retailer sells it to the customer at 10% profit.

Concept Used:

Selling Price = Cost Price + Profit

Calculation:

Let the cost of manufacturing of the article = 100

The manufacturer sells a product to the wholesaler at a profit of 20%

⇒ manufacturer sells at 100 × 120/100 = 120

The wholesaler sells it to the retailer at profit of 15%

⇒ wholesaler sells at 120 × 115/100 = 138

The retailer sells it to the customer at 10% profit

⇒ Retailer sells at 138 × 110/100 = 151.8 = Price at which customer buys the product

Accordingly,

151.8 = INR 759     

⇒ 1 = INR 5   

⇒ 100 = INR 500 

∴ The cost of manufacturing of the article is Rs. 500.

Shortcut Trick

100 × 1.2 × 1.15 × 1.1 = INR 759

⇒ 151.8 = INR 759

⇒ 1 = INR 5

⇒ 100 = INR 500 = Cost of manufacturing of the article

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