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When a manufacturer allows 10% commission on the wholesale price of Rs. 5000 for a particular item, he earns a profit of 25%. How much profit does the manufacturer earn on that item?

When a manufacturer allows 10% commission on the wholesale price of Rs. 5000 for a particular item, he earns a profit of 25%. How much profit does the manufacturer earn on that item? Correct Answer Rs. 900

Marked price = M.P = Rs. 5000

After allowing commission of 10%

Sale price = S.P = (1 - 0.1) × 5000 = 0.9 × 5000 = 4500

Profit % = 25%

Profit percentage = (profit/C.P) × 100 = {(S.P - C.P)/C.P} × 100

C.P = cost price

{(4500 - C.P)/C.P} × 100 = 25

⇒ 450000 - 100C.P = 25C.P

⇒ 125C.P = 450000

⇒ C.P = 3600

∴ Profit earned by manufacturer on that item = S.P - C.P = 4500 - 3600 = 900

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